Clients do not have to worry about banks downgrade - Cas Coovadia

The Banking Association of South Africa's (Bassa) Cas Coovadia says the ripple effect of a sovereign credit ratings downgrade on the country’s banks is expected and should not be a cause for worry.

On Tuesday Standard & Poor’s (S&P) Global announced the country’s sovereign credit rating has been downgraded to BB+.

The agency has confirmed its also downgraded South Africa’s banks to non-investment grade.

Coovadia says the institutions have enough capital to handle a the event.

READ: What happens to economies when downgraded (It doesn't look good for SA)

Our banks are well capitalised. We are the second most sound banking sector in the world.

Cas Coovadia, MD of the Banking Association of South Africa

Banks being downgraded is expected because the banks don’t have a higher rating than their sovereign, so when the sovereign is downgraded the banks will get downgraded.

Cas Coovadia, MD of the Banking Association of South Africa

It is not a reflection on the soundness of the banks, it’s not a reflection on the capitalisation of the banks, our banks will manage this. It’s more a reflection on political stability and policy stability on the country at the moment.

Cas Coovadia, MD of the Banking Association of South Africa

He admits however that interest rates could go up and in turn affect the cost of services at your bank.

Click on the link below to listen to the full interview...

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Treasury DG Lungisa Fuzile explains (on The Money Show) why he quit

Treasury DG Lungisa Fuzile explains (on The Money Show) why he quit

He had been seen as crucial to maintaining stability at the Treasury after Gigaba replaced Gordhan as minister.

Why downgrade and JZ’s Cabinet reshuffle will bash mining (employer of 493 000)

Why downgrade and JZ’s Cabinet reshuffle will bash mining (employer of 493 000)

Arabile Gumede (on The Money Show) interviews Chamber of Mines South Africa Chief Economist Henk Langenhoven.

Consequences of being downgraded to junk status: Magda Wierzycka

Consequences of being downgraded to junk status: Magda Wierzycka

Chief Executive Officer of Sygnia Group explains in detail what South Africa would have to go through as a result of a downgrade.

What happens to economies when downgraded (It doesn't look good for SA)

What happens to economies when downgraded (It doesn't look good for SA)

Standard Bank Chief Economist, Goolam Ballim, says it won't be easy for South Africa to survive the consequences of a downgrade.

No need to fear downgrade yet - economist

No need to fear downgrade yet - economist

Thabi Leoka comments on how Cabinet reshuffle will affect SA's credit ratings with Moody's review looming.

Popular articles
LISTEN: Gerrie Nel on why he's persuing prosecution against Duduzane Zuma

LISTEN: Gerrie Nel on why he's persuing prosecution against Duduzane Zuma

AfriForum will prosecute Duduzane Zuma after NPA declined to do so in 2015 following a 2014 accident where a woman died.

How we invented the modern concept of sleep

How we invented the modern concept of sleep

Dr Bodhisattva Kar reveals how industrial capitalism influenced the world's current sleep patterns.

Hassen Adams (he brought Burger King and Dunkin’ Donuts to SA) talks money

Hassen Adams (he brought Burger King and Dunkin’ Donuts to SA) talks money

The Money Show’s Bruce Whitfield interviews Adams about his attitude to money (hopes and fears, successes and failures, etc.).

Kloof Street residents living in fear as crime multiplies

Kloof Street residents living in fear as crime multiplies

A Cape Town man was stabbed to death on Saturday while trying to assist two women who were being mugged on Kloof street.

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

After 3 years there are 3 Nic Harry stores (incl online) that sell 100 000 pairs of socks in over 20 countries around the world.