(Dec 1): Standard & Poor's Ratings Services cut the ratings on five Australian banks on Thursday as a result of major changes in the criteria it uses to assess risk.
Australia and New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac Banking Corp were each cut one notch to AA minus, the fourth highest credit rating on S&P's scale.
Macquarie Group Ltd was cut by two levels to BBB, the ninth highest grade.
Standard Chartered Plc's rating was increased one level to A plus, the fifth highest rating.
The rating on Singapore bank DBS Bank Ltd was left unchanged at AA minus following the revision. Overseas-Chinese Banking Corp Ltd and United Overseas Bank were each raised by one level to AA minus.
In Japan, Nomura Holdings Inc was left unchanged at BBB plus and Sumitomo Trust & Banking Co Ltd was also left unchanged, at A plus. Resona Bank Ltd was left unchanged at A.
The Bank of East Asia Ltd was raised one level to A.
Earlier this week, S&P reduced the credit rating on 15 big banks, mostly in Europe and the United States, as part of its sweeping overhaul of its ratings criteria.
The announcement by S&P comes at a time when markets for bank debt are on edge because of the European debt crisis. It could increase already-soaring funding costs for some banks.
But S&P began warning financial markets more than a year ago that it was revising its ratings.
The overhaul is part of a broad, multi-year drive by the agency to improve its products and repair its reputation. S&P badly tarnished its image by wrongly putting triple-A ratings on securities backed by subprime mortgages. The agency is owned by the McGraw-Hill Companies Inc.
S&P officials expect the new system to allow the agency to more quickly change ratings when it sees new threats to bank funding or sees governments become less willing to bail out creditors.
The criteria are also intended to make better comparisons of banks around the world by applying consistent measurements of bank capital, S&P officials said.
Australia and New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac Banking Corp were each cut one notch to AA minus, the fourth highest credit rating on S&P's scale.
Macquarie Group Ltd was cut by two levels to BBB, the ninth highest grade.
Standard Chartered Plc's rating was increased one level to A plus, the fifth highest rating.
The rating on Singapore bank DBS Bank Ltd was left unchanged at AA minus following the revision. Overseas-Chinese Banking Corp Ltd and United Overseas Bank were each raised by one level to AA minus.
In Japan, Nomura Holdings Inc was left unchanged at BBB plus and Sumitomo Trust & Banking Co Ltd was also left unchanged, at A plus. Resona Bank Ltd was left unchanged at A.
The Bank of East Asia Ltd was raised one level to A.
Earlier this week, S&P reduced the credit rating on 15 big banks, mostly in Europe and the United States, as part of its sweeping overhaul of its ratings criteria.
The announcement by S&P comes at a time when markets for bank debt are on edge because of the European debt crisis. It could increase already-soaring funding costs for some banks.
But S&P began warning financial markets more than a year ago that it was revising its ratings.
The overhaul is part of a broad, multi-year drive by the agency to improve its products and repair its reputation. S&P badly tarnished its image by wrongly putting triple-A ratings on securities backed by subprime mortgages. The agency is owned by the McGraw-Hill Companies Inc.
S&P officials expect the new system to allow the agency to more quickly change ratings when it sees new threats to bank funding or sees governments become less willing to bail out creditors.
The criteria are also intended to make better comparisons of banks around the world by applying consistent measurements of bank capital, S&P officials said.
The agency indicated in February that the banks may have their ratings downgraded as a result of its review of ratings criteria. Bank lending criteria is important for banks for its stability.
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