Moody’s Downgrades 15 Global Banks

by Christopher Freeburn | June 22, 2012 10:46 am

Moody’s issued its long-expected review of international banks late yesterday[1], downgrading the credit ratings of 15 banks, including some of the largest and best known global banks.

Wall Street had been awaiting the results of the review since Moody’s announced it back in February. The agency said it would examine 17 large banks with international capital markets units, Reuters noted.

Among the banks hit by Moody’s downgrades yesterday were Bank of America (NYSE:BAC[2]), Morgan Stanley (NYSE:MS[3]), Citigroup (NYSE:C[4]), Credit Suisse (NYSE:CS[5]), Barclays (NYSE:BCS[6]), BNP Paribas, Royal Bank of Canada (NYSE:RY[7]), Goldman Sachs Group (NYSE:GS[8]), JPMorgan Chase (NYSE:JPM[9]), Credit Agricole, and Deutsche Bank (NYSE:D[10]B). Nomura (NYSE:NMR[11]) and Macquarie were included in the originally announced review, but had their credit ratings cut before yesterday.

The most severe downgrade was applied to Credit Suisse, which had its credit rating cut three notches. The move surprised analysts who had expected Morgan Stanley to receive the worst ratings hit.

Moody’s cut Morgan Stanley’s credit rating by two levels, which was one less than Wall Street has expected, sending its shares up about 2% in Friday trading. Still, company officials complained that the downgrade did not take into account the “strategic actions” it had taken since the financial collapse.

UBS (NYSE:UBS[12]), Barclays, BNP Paribas, Citigroup, Goldman Sachs, Deutsche Bank, Credit Agricole, Royal Bank of Canada and JPMorgan Chase were also downgraded by two notches, while HSBC (NYSE:HBC[13]), Bank of America, Royal Bank of Scotland (NYSE:RBS[14]) and Societe Generale (PINK:SCGLY[15]) were lowered by one notch.

Citigroup criticized Moody’s for being “disproportionally adverse” on American banks, compared to European institutions.

Bank shares were trading mostly upward on Friday morning.

Endnotes:
  1. long-expected review of international banks late yesterday: http://www.reuters.com/article/2012/06/22/financial-moodys-idUSL5E8HLC7Z20120622
  2. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  3. MS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MS
  4. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  5. CS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CS
  6. BCS: http://studio-5.financialcontent.com/investplace/quote?Symbol=BCS
  7. RY: http://studio-5.financialcontent.com/investplace/quote?Symbol=RY
  8. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  9. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  10. D: http://studio-5.financialcontent.com/investplace/quote?Symbol=D
  11. NMR: http://studio-5.financialcontent.com/investplace/quote?Symbol=NMR
  12. UBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=UBS
  13. HBC: http://studio-5.financialcontent.com/investplace/quote?Symbol=HBC
  14. RBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=RBS
  15. SCGLY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SCGLY

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