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Fitch downgrades Nedbank Group's support rating, assigns support rating floor

Fitch Ratings on Dec. 5 affirmed the BB+ long-term issuer default ratings of Nedbank Group Ltd. and Nedbank Ltd. and downgraded to 5 from 4 the support rating of Nedbank Group.

The outlook on both entities' long-term term issuer default ratings is stable.

The agency affirmed the two entities' B short-term foreign-currency issuer default rating; "bb+" viability rating; F1+(zaf) national short-term rating; and AA(zaf) national long-term rating, with a stable outlook.

Also affirmed were Nedbank Ltd.'s 3 support rating, BB- support rating floor and BB+/B senior unsecured long-term and short-term ratings.

Fitch said the downgrade follows the announcement of a clear time frame for Nedbank Group's separation from ultimate parent Old Mutual Plc as part of the latter's planned managed breakup of its four businesses and reflects the rating agency's view that support from Old Mutual can no longer be relied on.

At the same time, Fitch assigned a No Floor support rating floor to Nedbank Group, with the belief that support for the holding company is now more likely to come from the authorities as opposed to Old Mutual. Support from authorities, however, can also not be relied on as Fitch does not believe that sovereign support would extend to bank holding companies.