(The following statement was released by the rating agency)
Jan 29 - Fitch Ratings says it expects South African structured finance asset performance to be stable in 2013. The low interest environment is supporting borrowers and is helping to balance downside pressure from the economic slowdown. This support is bolstered by the availability of credit to consumers and businesses, stemming from a generally sound financial system. These factors translate into a stable outlook for the national scale ratings of all structured finance sectors in South Africa.
“Although the agency forecasts a mild slowdown in South African economic activity over the next 12 months, characterised by high unemployment and weakening private consumption, Fitch believes that defaults are likely to remain within base-case expectations,” says Andreas Wilgen, Managing Director in Fitch’s Structured Finance team.
RMBS transactions have shown either stabilising or improving arrears since early 2011 and low interest rates are a key contributor. Fitch also sees an improvement in affordability as nominal income, as a proportion of nominal house prices, has grown and returned to pre-crisis levels.
‘2013 Outlook: South African Structured Finance’ is available at www.fitchratings.com or by clicking on the link below.
Link to Fitch Ratings’ Report: 2013 Outlook: South African Securitisations