Australia’s leading banks have so far endured the financial crisis but the sector was dealt a blow yesterday after Moody’s downgraded the rating outlooks for ANZ, CBA and Westpac.
NAB’s credit outlook was already downgraded to negative late last year.
"The negative outlook reflects the potential for the deepening global economic downturn to have a protracted impact on the banks' asset quality and earnings", said Patrick Winsbury, senior vice president of Moody's Sydney office.
The banks’ credit ratings of Aa1 – now a privilege of only a dozen international banks remained unchanged however and Moody’s emphasised this was unlikely to change because of the better health of the Australian economy, and among other things, the banks’ low exposure to “toxic” assets.
"... on an absolute basis, all three banks continue to have strong credit profiles and benefit from a very high level of support from the Australian government. Consequently, even in a severe downside scenario we would expect Australia's major banks to remain solidly positioned within the Aa rating band," he said.
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