Fitch downgrades Lloyds and RBS
Fitch Ratings has downgraded Lloyds Banking Group and Royal Bank of Scotland to “A” after revising its support rating floors for “systemically important UK banks”.
The long-term issuer default ratings were both downgraded from their previous ’AA-’ rating, while the agency also placed Barclays issuer default rating on “rating watch negative”, one step away from a downgrade.
The agency said the revision of the support rating floors represented its view that support dynamics in the UK are changing.
“The banking system is not only large relative to the UK economy, but there is also more advanced political will to reduce the implicit support for the country’s banks, building on the Banking Act 2009 and, more recently the various policy recommendations of the Independent Commission on Banking,” according to analysts.
However, the downgrade represented the view that support for senior creditors was “less certain”.