03 February 2016

Moody’s upgrades credit ratings of Investec Bank plc and Investec plc

Credit ratings agency Moody’s has upgraded the ratings of Investec Bank plc (IBP) and Investec plc. The following key rating upgrades were published by Moody’s on February 2, 2016.

With respect to Investec Bank plc (IBP):

  • IBP’s Long term deposit rating has been upgraded to A2 with a stable outlook from A3 stable outlook
  • IBP’s Long term senior unsecured rating has been upgraded to (P)A2 from (P)A3
  • IBP’s Short term deposit rating has been upgraded to highest short term rating of Prime-1 from Prime-2
  • IBP’s Subordinated debt rating has been upgraded to an investment grade rating of Baa3 from Ba1
  • IBP’s baseline credit assessment (BCA) has been upgraded one notch to baa2 from baa3 – this change is the key driver of all rating changes shown above.

With respect to Investec plc:

  • Investec plc’s long term senior unsecured and issuer ratings have been upgraded to Baa2 from Baa3. These ratings are under review for further upgrade.

The upgrades are largely the reflection of:

  • Continued improvement in the credit fundamentals of IBP
  • A substantial reduction in the bank’s legacy business in the UK, in particular its commercial property lending risk
  • Less complexity, a result of the sale of IBP’s banking businesses in Australia, intermediated mortgage businesses in the UK and Ireland as well as certain other mortgage assets
  • A more diversified revenue base with greater focus on capital light businesses
  • Reduction in impairments
  • Strong levels of liquidity and strong capitalisation