Moody’s Investors Service downgraded Landbank’s status to junk.
Moody’s says the negative outlook reflects the diminishing ability of the South African government to support the state-owned Land Bank if needed.
“The challenging operating conditions, as well as the inability to appoint a permanent CEO who can play a continuous oversight role over the Land Bank’s operations and provide strategic direction, also put pressure on the Land Bank’s financial performance, detached assessment and investor confidence. , ” Moody’s Investors agency said this week.
Moody’s has already warned that a downgrade is pending since November. After this rating, the bank is now junk status.
“It’s going to be more expensive for the Land Bank to do business because the bank relies on funds from elsewhere to provide credit to clients. As a result of the downgrading, the Land Bank will now have to pay more for the funds that will lead to an increase in the interest rate for its clients, ”Meintjes said.
He also warns that the downgrade is probably just the beginning of the downgrade of several other state institutions – and finally the country itself.