South African banks will largely be at the mercy of improving governance in the state in the coming quarters when it comes to their performance. Constrained private sector credit growth will continue to weigh on banks through 2019, but should be partially offset by the growing need for local banks to finance government deficits as investor demand for bonds drops off, according to ratings agency BMI Fitch. On Friday Fitch downgraded its outlook for South African bank asset growth for 2018, saying assets should only grow 6% year on year in 2018, from a previous forecast of 7%. Weaker than expected economic growth and tightening monetary policy were cited as reasons. Improved sentiment accompanying Cyril Ramaphosa’s rise to the presidency in February 2018 had not yet translated into increased investment or demand for credit, said Fitch. Private sector credit expanded by a relatively lacklustre 2% in March, compared to the same month in 2017. "Though we expect that progress towards impl...

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