South African bank index tumbles as S&P's junk rating puts earnings at risk

Johannesburg

SOUTH Africa's bank index fell to the lowest in six months after S&P Global Ratings cut the country's foreign currency debt rating to junk, increasing the likelihood that lenders will have to battle declining returns and rising bad debts in the year ahead.

South Africa's six-member bank index, which includes Standard Bank Group Ltd and Barclays Africa Group Ltd, has plummeted more than 9 per cent since President Jacob Zuma fired the finance minister Pravin Gordhan, making it the country's worst performing stocks gauge this year.