GCR has reaffirmed Barclays Bank of Zimbabwe Limited’s (“Barclays”) long term domestic Z$ currency rating of AA- (double A minus). However, the rating has been placed on rating watch. Barclays is one of the largest banks in Zimbabwe, with Barclays Bank Plc holding a 67.8% stake in the bank. The level of technical and financial support offered by the bank’s parent company was favourably considered.

 

GCR has retained Stanbic Bank Zimbabwe Limited’s (“Stanbic”) long term domestic Z$ currency rating of AA- (double A minus). In addition, the rating has been placed on rating watch. Stanbic is a wholly owned subsidiary of the Standard Bank Group of South Africa, one of the largest banking groups in Africa with a capital base of approximately US$181bn and a market capitalisation of US$22bn as at 31 December 2009. The level of technical and implied financial support offered by the bank’s parent company, coupled with the ability to leverage off the strong brand name, was favourably considered.

 

GCR has maintained African Oxygen Limited’s (“Afrox”) domestic ZAR currency ratings of A+ (single A plus) and A1 (single A one) for the long and short term respectively. When the rating was previously reviewed in August 2009, the rating panel deemed it necessary to conduct a further review following the release of the full year F09 results, in light of the significant deterioration in company’s operating environment. While some stabilisation of earnings was noted, given the continued uncertainty surrounding the operating environment, GCR elected to maintain the ‘rating watch’. Nevertheless, the rating is underpinned by a sound underlying business model, reinforced by strong shareholder support from its parent, Linde AG.  

 

The year 2009 provided little relief for the industry, as the underlying economy remained inhibited and liquidity conditions tightened further. While interest rates have declined by a cumulative 600 basis points from June 2008 to date, and the economy is technically out of the recession, real GDP contracted by 1.8% in 2009. As such, the moderate premium growth registered by the short term insurance industry in 2008 is forecast to have persisted in 2009. Despite the declining rates of return on money market securities, the recovery of the stock market underpinned the growth of balance sheets on the back of unrealised gains.

 

NICO General Insurance Company Limited’s (“NICO”) domestic MK currency claims paying ability rating was maintained at AA- (double A minus). The rating is a reflection of the insurer’s established position in the Malawian non-life insurance arena, with the company maintaining its status as the market leader in both premium and capital terms.