Cape Town - The downgrading of South African banks by Fitch will lead to an increase in their lending rates, according to economist Mike Schussler.

Fitch cut the credit ratings of FirstRand, Nedbank, Standard Bank and Absa in the wake of downgrading South Africa's debt to one notch above junk status.

Normally when there is an upgrade or a downgrade of a sovereign credit then banks usually follow suit in a couple of weeks.