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Barclays, RBS, Lloyds and HSBC downgraded by S&P
by Sarah Miloudi on Nov 30, 2011 at 08:07
Barclays, Lloyds, HSBC and Royal Bank of Scotland (RBS) have come under pressure as a new rating model is introduced at Standard & Poor's (S&P), sparking a string of credit downgrades across the sector.
The rating agency has reduced its credit ratings on 15 large banking companies, mostly in Europe and the US, as a sweeping overhaul of its analysis process saw the introduction of a new model that considers funding risks and gives more weight to economic headwinds.
Barclays, HSBC Holdings, Lloyds and RBS were downgraded by one notch each. JP Morgan Chase & Co, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley and UBS also had their ratings cut.
The downgrade by one notch represents a third of a letter, S&P explained.
The downgrades were issued after the market had closed on Tuesday evening but come at a time when the financial sector already faces huge strain.
Lloyds and RBS are now rated A- by S&P, that Barclays is rated A and HSBC A+.
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6 comments so far. Why not have your say?
Commentator 761497856
Nov 30, 2011 at 09:01
Shambles
report thisCharles Rickards
Nov 30, 2011 at 09:05
Can't help feeling that too much hangs on the opinion of too few!
report thisAnitaki
Nov 30, 2011 at 09:14
These banks are no weaker now than they were 3 months ago, they are possibly stronger in fact. But S&P and all ratings agencies have a lot to answer for. I'm amazed that people still place so much reliance on their opinions after they have been so discredited. But, sure as eggs are eggs, all the U.K. bank share prices have fallen today because of this, undermining any remaining economic confidence still further.
report thisChris F
Nov 30, 2011 at 09:37
Quis custodiet ipsos custodes?
report thisAdam Grant
Nov 30, 2011 at 10:52
In a review of 37 of the largest financial institutions in the world under the new ratings system, Santander UK’s rating was revised down from A+ to A and Barclays as a whole rose from A to A+, while Barclays Bank and Barclays Capital were both revised up from A+ to AA-.
HSBC Holdings was upgraded from A+ to AA- and Lloyds Banking Group was upgraded from A- to A.
So who is telling the truth - Citywire or FT,...?
report thisBanged to Rights
Nov 30, 2011 at 10:59
Santander lucky to get a "A" ? watch this one.
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