Moody's reduces UK banks' ratings
Source: Agencies |
October 8, 2011, Saturday
|
Print Edition
Print Edition
A dozen British banks saw their credit ratings downgraded yesterday over doubts about the strength of the government's support, in another sign that the banking sector is facing renewed stresses.
Moody's Investors Service insisted that its downgrades have nothing to do with any worsening in the financial strength of the sector or over the state of the government's public finances as economic growth stalls. A near standstill in growth prompted the Bank of England on Thursday to launch a 75-billion-pound (US$117 billion) monetary stimulus.
Among the downgrades, Moody's reduced its rating on government-controlled Royal Bank of Scotland PLC by two notches to A2. It also cut its rating on Lloyds TSB Bank, a unit of part-nationalized Lloyds Banking Group PLC by one notch to A1.
Spain's Banco Santander SA had its UK business downgraded by one notch to A1, while Nationwide Building Society saw a two-notch cut to A2. But there were no changes in the ratings of Barclays PLC and HSBC PLC.
While the agency believes that the British government will continue to provide some support to systemically important financial institutions, it said it is more likely to allow smaller institutions to fail.
"The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government," Moody's said.
RBS said it was disappointed that "Moody's have not acknowledged the progress we have made in strengthening the bank's credit profile."
Treasury chief George Osborne said the downgrades reflected the government's determination to move away from guaranteeing all the big banks.
Moody's Investors Service insisted that its downgrades have nothing to do with any worsening in the financial strength of the sector or over the state of the government's public finances as economic growth stalls. A near standstill in growth prompted the Bank of England on Thursday to launch a 75-billion-pound (US$117 billion) monetary stimulus.
Among the downgrades, Moody's reduced its rating on government-controlled Royal Bank of Scotland PLC by two notches to A2. It also cut its rating on Lloyds TSB Bank, a unit of part-nationalized Lloyds Banking Group PLC by one notch to A1.
Spain's Banco Santander SA had its UK business downgraded by one notch to A1, while Nationwide Building Society saw a two-notch cut to A2. But there were no changes in the ratings of Barclays PLC and HSBC PLC.
While the agency believes that the British government will continue to provide some support to systemically important financial institutions, it said it is more likely to allow smaller institutions to fail.
"The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government," Moody's said.
RBS said it was disappointed that "Moody's have not acknowledged the progress we have made in strengthening the bank's credit profile."
Treasury chief George Osborne said the downgrades reflected the government's determination to move away from guaranteeing all the big banks.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
