12 UK and 9 Portuguese Banks Downgraded by Moody's

Ouch · Oct 7, 2011

Twelve UK banks have been downgraded by a leading credit ratings agency, on the back of reduced Government support.

Moody's cut its rating on state-owned banks RBS (LSE: RBS.L - news) by two notches and Lloyds TSB (LSE: LLOY.L - news) by one notch, taking both to Aa3 (SNP: ^AA3Y - news) .

Other institutions to be downgraded included the UK arm of Spain's Santander (Madrid: SAN.MC - news) , Co-Operative bank, Nationwide building society and several smaller UK banks.

In a statement, the ratings agency said the downgrades were caused by a reduction in confidence after the Government withdrew its backing for seven smaller institutions and scaled back its support for the five "larger, more systemically important financial institutions."

It added that medium- to long-term support was unpredictable but that it expects the Government to continue to support the bigger banks which are more systemically linked.

"However, it is more likely now to allow smaller institutions to fail if they become financially troubled," it warned.
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The ratings agency also downgraded nine Portuguese banks.
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Source: http://uk.finance.yahoo.com/news/UK...5ZmlUb3BTdG9yaWVzBHNsawN1a2JhbmtzZG93bmc-?x=0

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12 UK and 9 Portuguese Banks Downgraded by Moody's

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12 UK and 9 Portuguese Banks Downgraded by Moody's

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