S&P Cuts Ratings on European Banks 

Deutsche Bank, RBS, Barclays are among the banks being downgraded

Standard & Poor’s Ratings Services cut its credit ratings on several European commercial banks on Tuesday, saying it considers the prospect that the governments would provide extraordinary support to their banking systems to be uncertain.

The firm lowered its ratings on Deutsche Bank AG, Royal Bank of Scotland NV and Commerzbank AG to triple-B-plus, three notches above junk territory. For RBS and Commerzbank, that marked a one-notch downgrade, but it was two for Deutsche Bank.

Barclays PLC, meanwhile, got a one-notch downgrade to A-minus, putting it a level above the other banks. And S&P cut UniCredit Bank AG by two levels to triple-B.

S&P said the outlooks on Barclays, Deutsche Bank and Royal Bank of Scotland are stable, while Commerzbank and UniCredit are negative.

The credit rater affirmed its ratings on Lloyds Bank PLC and HSBC Bank PLC and said the outlooks are stable.

S&P said the ratings actions reflect the introduction of well-formed bank resolution frameworks in those countries and the continuing regulatory impetus to have banks with systemic importance hold sizeable capital buffers as well as reduced prospects for government intervention in any potential crisis.

As for the big Swiss banks, S&P revised its outlook on Credit Suisse AG and UBS AG to stable from negative, pointing to their capital buffers, which the ratings firm expects to keep growing in the coming two years.

The ratings firm also removed its ratings on several other European banks from its watch list for potential downgrade.

Source: WSJ – S&P Cuts Ratings on European Banks

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