Moody's cuts ratings for 12 UK banks

10 October 2011

A dozen banks in the UK have seen their senior debt and deposit ratings reduced by Moody's Investors Service.

The organisation stated it will be unlikely that the nation's government will be able to offer support should another financial failure occur in the future.

Royal Bank of Scotland - which was founded in 1727 - and Nationwide Building Society endured a drop of two notches, while Santander UK, Lloyds TSB and Co-Operative Bank each fell by one.

In addition, a number of smaller financial institutions saw their levels slashed by between one and five levels.

Michael Symonds, a credit analyst at Daiwa Capital Markets Europe, told Bloomberg: "Moody's has pulled the trigger a little early. The escalation of the sovereign and banking crisis [will] result in a broad government-backed recapitalisation of the continent’s banks."

Moody's added that guidance from the Bank of England, the Treasury and the Financial Services Authority has suggested struggling lenders should not expect a bailout from the taxpayer in the future.

By Asim Shah

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