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Proactive Investors Australia

Proactive Investors is a leading financial and investor website and platform, dominating the "Small-Mid Cap" investor space with multiple investor "channels" and "touch-points."

 

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Banks suffer from ratings downgrade threat, Commonwealth Bank, National Australia Bank, ANZ drop

Tuesday, January 31, 2012 by Christine Feary
Banks suffer from ratings downgrade threat, Commonwealth Bank, National Australia Bank, ANZ drop

Ratings agency Fitch Ratings has placed Australia’s biggest banks on Rating Watch Negative, following a broad review of the largest banking institutions in the world and a newly published report on major banks in Australia and Canada.

Fitch has threatened all of the big four banks, Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation and Australia and New Zealand Banking Group, with a possible rating downgrade.

The Ratings Watch Negative status has been applied to the Long-Term Issuer Default Ratings and Viability Ratings, along with many subsidiaries’ ratings, for the big four.

The comparison of major banks in Australia and Canada reflects their status as some of the highest rated banks in Fitch’s area, along with broad similarities in their economies and banking systems.

Six major Canadian banks were given Stable Rating Outlooks.

On the ASX today, the news hit the financial sector, with Westpac Banking Corporation (ASX: WBC) the only one of the big four to record a gain.

Westpac closed 0.24% higher at $21.15.

Commonwealth Bank (ASX: CBA), the first to release the news, was the hardest hit, closing down 0.75% at $50.68.

Australia and New Zealand Banking Group (ASX: ANZ) finished the day down 0.28% at $21.41, with National Australia Bank (ASX: NAB) down 0.25% at $20.25.

Other financial stocks were also impacted, although tier two banks Bendigo and Adelaide Bank (ASX: BEN) and the Bank of Queensland (ASX: BOQ) both managed to escape the slide.

Bendigo closed the day up 0.73% at $8.29 and Bank of Queensland finished at $7.58, up 0.24%.

AMP (ASX: AMP) closed flat.

Suncorp Group (ASX: SUN) had the smallest drop of the day, sliding 0.12% to $8.41.

This was followed by Perpetual (ASX: PPT), down 0.25% at $20.25.

Macquarie Group (ASX: MAQ) also fell, closing down 0.27% at $7.39.

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