S&P dismisses Viceroy report on Capitec and keeps its rating unchanged
S&P Global Ratings dismissed Viceroy Research’s claim that Capitec is hiding massive bad loans, issuing a bulletin on Wednesday saying its rating of the bank remained unchanged by the short-seller’s report and the market reaction to it. "Our ratings on the bank continue to reflect those on SA, as well as the bank’s strong capitalisation and conservative reserving, which is appropriate for high normalised credit losses," S&P said. "We also factor in the bank’s good earnings stability for a monoline unsecured consumer lender." The credit rating agency said the stock market’s reaction to Viceroy’s report was significant, but it had fortunately not sparked a run on the bank. Capitec’s share price lost more than 20% after the report was released but recovered after the Reserve Bank released a statement defending the soundness of the bank’s capitalisation and liquidity. "To date, the bank has experienced only mild funding outflows and its liquidity remains sound," S&P said.
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