S&P slaps downgrades on 15 major global banks
SOME OF the world’s biggest banks were hit with credit rating downgrades from ratings agency Standard & Poor’s yesterday after a sweeping overhaul of the criteria it uses to assess institutions’ financial strength.
S&P downgraded 15 banks after reviewing the ratings of 37 major institutions. It dropped seven of the top US banks by one notch, including the four biggest by assets: JP Morgan; Bank of America, Citigroup and Wells Fargo. The others were Goldman Sachs, Morgan Stanley and BNY Mellon, with only State Street’s rating left unchanged.
UK banks were also affected, with RBS, Lloyds and HSBC each downgraded by one notch and some of Barclays’ strategic subsidiaries downgraded by one place as well.
Others in Europe such as Deutsche Bank and Credit Suisse were moved from a stable to a negative outlook.
But S&P’s review left scores of other emerging markets and European bank ratings untouched, such as Banco Santander; Credit Agricole, Commerzbank and Brazilian and Argentinian names among others.
S&P said fears over capital adequacy and banks’ sovereign debt holdings dogged some institutions while mortgage lenders were under pressure in the US. It also factored in the loss of government guarantees.