the adviser logo

Big banks cop ratings outlook downgrade

by Staff Reporter7 minute read
The Adviser

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.



Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more