UK banks face ratings cut

7 April 2011

A number of UK banks could face a ratings cut, it has been suggested.

Moody's noted 19 such institutions may see their ratings change to reflect the lower chance of a future government bailout.

The rating agency noted it would be smaller lenders - such as building societies – who were likely to be hit by the alterations, while larger organisations will be considered in the second half of the year.

It explained that such developments are not a reflection of any deterioration of performance on the financial strength of the UK government.

This reassessment "could trigger negative outlooks, reviews for possible downgrade, or downgrades for some ratings and will be taking into consideration Moody's expectations on how the relevant banks' standalone credit strength will develop", the agency added.

The Daily Mail recently reported that the Independent Commission on Banking is to release a report next week that will react to suggestions that increased regulation will result in large banks leaving the UK.

By Tony Aynsley

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development