Fitch cuts RBS and Lloyds
BANKS worldwide came under fire from a zealous round of downgrades by credit rating agency Fitch yesterday, knocking share prices for the UK’s biggest lenders.
Fitch cut the long-term default rating of both RBS and Lloyds by one notch to A and put Barclays on a negative outlook to reflect the reduced chance of another bailout from the UK government.
The downgrades were the second in one week after Moody’s cut ratings on 12 UK banks and building societies last Friday. Barclays’ shares ended the day down 7.4 per cent, while RBS lost 6.4 per cent and Lloyds fell 5.5 per cent.
French, German and US banks were also targeted by the rating agency, which said it saw “increasing pressure on banks globally and European banks in particular”.
Fitch put France’s BNP Paribas, Société Générale and Crédit Agricole, and Germany’s Deutsche Bank on a negative outlook in expectation of a one or two notch downgrade in the near future.
In the US it placed Bank of America, Morgan Stanley and Goldman Sachs on negative watch for an imminent downgrade. “These institutions’ business models are particularly sensitive to the increased challenges the financial markets are facing,” Fitch said.