Moody's may downgrade 14 UK banks

Three month review sees RBS and Lloyds face credit rating drop.

By Alice Gribbin Published 24 May 2011

Royal Bank of Scotland and Lloyds are among fourteen UK banks and building societies whose credit ratings face being cut because of government support withdrawal. The downgrade would increase borrowing costs for such lenders.

Santander UK and Nationwide Building Society may also suffer a downgrade following the debt ratings review of UK banks carried out by Moody's Investors Service. Currently Lloyds, RBS and Santander's debt is Aa3 rated; Nationwide's Aa3/P-1.

A senior credit officer for Moody's said: "The reassessment is not driven by either a deterioration in the financial strength of the banking system or that of the government. It has been initiated in response to ongoing guidance from the UK authorities - the Bank of England, the Financial Services Authority and the Treasury."

The surprise announcement comes after a Bank of England decision not to roll over the Special Liquidity Scheme emergency fund when it expires in January of next year.

Barclays and HSBC will not feature in the Moody's review.

 
 

3 comments

valentine perera's picture

Fri, 2011-05-27 17:51 — valentine perera (not verified)

kindly let me know the meaning of a Aa3 and Aa3P-1 rated Bank?

diggers's picture

Tue, 2011-06-07 21:50 — diggers (not verified)

Aa3 is the lower end of high value credit.......still good jus not as good. P1 is a short term rating....again sub-prime but high enough

greenmurphy's picture

Thu, 2011-06-09 21:33 — greenmurphy (not verified)

Do you trust the record of these ratings agencies? I don't!

Taxpayers have £1.5 trillion of exposure to potentially toxic assets from Uk banks already

Meanwhile...

...Tullet Prebon think there is no way out of the UK debt trap from either side of the fiscal politics.

http://sodiumhaze.blogspot.com/2011/06/no-way-out-of-uk-debt-trap-say-br...

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