We have noted Standard and Poor’s (S&P) decision to downgrade South Africa’s foreign currency credit rating to sub-investment grade, and the local currency to just one notch above investment grade, as well as their latest decision to downgrade South African banks in line with the sovereign rating. As a result, the national scale rating of Absa Bank Limited has been reduced to ‘zaA’ from its previous rating of ‘zaAA’.

Due to the intermediary role banks play in any economy it is the norm for their credit rating to be very closely linked to that of the country, and their decision to reduce the Absa Bank rating was therefore expected in light of recent events. S&P does not rate South African banks above the foreign currency rating of the sovereign. Therefore, the downgrade of the sovereign has a direct impact to banks that are systemic to the economy.

We also acknowledge Moody’s announcement that they are putting South Africa under review for a downgrade.

These are very disappointing developments because until last week the country was building momentum towards better economic growth by the end of this year. During the past 14 months, Barclays Africa has actively participated in various initiatives in support of government’s efforts to effect much-needed structural reforms, in order to stimulate inclusive economic growth. We remain committed to doing so, but an abrupt interruption to this program is unhelpful and places at risk the livelihoods of many South Africans.

Barclays Africa is well-capitalised with a strong liquidity position and a balance sheet of over R1trillion. We remain well capitalised in terms of our strategy, risk appetite, risk profile, business activities and the macroeconomic environment in which we operate. We have a diversified portfolio of businesses with geographical presence across 10 countries in Africa and are determined to continue growing across all our markets.

For the year ended 31 December 2016 we released a solid set of results which included R239billion of liquidity reserves and we expect to remain robust from a liquidity and funding perspective. Our Common Equity Tier 1 (CET1) capital position as at 31 December 2016 remained strong at 12.1% (R105bn) – above our board target range of 9.5% to 11.5% and well above the regulatory minimum of 6.9%.

It takes enormous effort over many years to regain an investment grade sovereign rating. It is therefore very important that all stakeholders continue to work together to rediscover consensus on how to achieve inclusive growth.