COVID-19 will see more demand from banks – Nedbank CEO
On Friday a few minutes before the clock struck midnight, Moody’s downgrade South Africa to junk. Mike Brown, CEO of Nedbank warns that this will make it increasingly difficult to borrow money around the world and in the COVID-19 era more will be expected from banks.
Mon, 30 Mar 2020 15:54:02 GMT
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AI Generated Summary
- Moody's downgrade to junk status poses challenges for South African banks amid the COVID-19 pandemic
- Government's limited fiscal space raises concerns about stimulus measures to support the economy
- Nedbank CEO emphasizes the bank's commitment to assisting customers and highlights the importance of a comprehensive stimulus approach
In a late-night move on Friday, Moody's downgraded South Africa's credit rating to junk status, sending ripples of concern throughout the financial sector. Mike Brown, CEO of Nedbank, expressed his views on the matter in an exclusive interview with CNBC Africa. Brown acknowledged that while the downgrade was not entirely unexpected, the timing of it amidst the challenges posed by the COVID-19 pandemic adds a new layer of complexity for South Africa. He highlighted the critical importance of government stimulus measures in bolstering the economy in times of crisis, but with limited fiscal space, there are concerns about the country's ability to provide adequate support. Brown emphasized the pivotal role that banks like Nedbank play in supporting their customers through these tough times, offering restructuring options for those facing cash flow challenges. Despite the downgrade making borrowing more expensive, Nedbank remains in a relatively favorable position due to its minimal reliance on external borrowings. Brown also commented on the Reserve Bank's recent actions to inject liquidity into the system and stressed the need for a multi-faceted approach to stimulate the economy.
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