Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Barclays, RBS and Lloyds swept up by S&P's string of downgrades

Barclays, RBS and Lloyds swept up by S&P's string of downgrades

Barclays, LloydsHSBC 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.  Moreover, for RBS the downgrade was issued on the same day as it received a €1.9 million penalty after a credit default swap (CDS) mistake.

The downgrades mean that Lloyds and RBS are now rated A- by S&P, that Barclays is rated A and HSBC A+.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Biotech Growth: we will ride out this storm

Biotech Growth: we will ride out this storm

Geoffrey Hsu of Biotech Growth Trust says the sell-off in biotechnology stocks represents a buying opportunity for long-term investors.

Play Picton: the UK property hotspots for rental income

Picton: the UK property hotspots for rental income

Picton Property Income CEO Michael Morris reveals how he is planning to ride the ‘ripple effect’ as UK economic growth spills out from the capital across the country.

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

This week Brewin Dolphin's head of research talks to Mike Riddell, fund manager at Allianz Global Investors, about the forces driving bonds markets in a tumultuous week for markets.

Your Business: Cover Star Club

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

In a buyers’ market for off-the-peg discretionary management, self-funded start-ups begin at an inherent disadvantage

Wealth Manager on Twitter