Moody's warns it may put top Canadian banks on downgrade watch

 

A Moody's sign on the 7 World Trade Center tower (file photo)

Source: Press TV

http://www.presstv.ir/detail/2012/10/27/268966/canada-banks-at-risk-of-being-downgraded/

Moody’s Investors Service has warned that it could slash the credit ratings of five top Canadian banks as the country is increasingly feeling the pinch of global financial crisis.

The rating agency said on Friday that the possible lowering of the banks’ rating by one notch is due to “concerns about high consumer debt levels and elevated housing prices.”

According to fresh official figures, Canadian consumer debt has increased to record highs in recent months as the ratio of household debt-to-income reached 163.4 percent in the second quarter of 2012, up from 161.8 percent in the first quarter.

“Domestically, we're concerned about the high and increasing levels of consumer indebtedness and elevated housing prices, and we feel that they may tend to leave the Canadian banks more vulnerable to downside risks to the economy than they have been in the past,” said David Beattie, Moody's vice president and senior credit officer.

Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC), and the National Bank of Canada are the ones that may be downgraded by the rating agency.

The Bank of Montreal's current Moody's rating is Aa2, the Bank of Nova Scotia's is Aa1, the CIBC's Aa2, the National's Aa2 and the Toronto-Dominion's, Aaa.

In a similar move in July 2012, Standard & Poor's (S&P) Ratings Services also put several Canadian banks on “negative outlook,” citing rising consumer debt and elevated housing prices

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Moody’s lowers credit rating of major Italian bank to Junk Status

 

Moody’s Investors Service has slashed the credit rating of Italy’s Banca Monte dei Paschi di Siena.

Source: Press TV

http://www.presstv.ir/detail/2012/10/18/267361/moodys-cuts-italy-bank-credit-rating/

Moody’s Investors Service has slashed the credit rating of Italy’s third biggest bank Banca Monte dei Paschi di Siena (BMPS) to ‘junk’ status, saying Rome’s recapitalization program is feared to prove inadequate.

The rating agency said on Thursday that the lowering of the bank’s rating by two notches to ‘Baaa3’ (a non-investment grade) reflects Moody’s view that there “remains a material probability that the bank will need to seek further external support.”

Earlier in June, BMPS, the world’s oldest bank, said it was set to borrow around 1.5 billion euros ( about 1.87 billion dollars) from the Italian government to pay off its debt and beef up its capital.

The ailing bank has also said it would downsize its workforce by 4,600 employees by 2015.

In July, Moody’s also lowered the debt ratings of 13 Italian banks, including Unicredit and Intesa Sanpaolo, by one to two notches, citing the Italian government’s weakened creditworthiness.

Several eurozone member states, including Greece, Spain and Italy, have been struggling with deep economic woes since the financial crisis began about five years ago.

Over the past decade, Italy has been the slowest growing economy in the euro area.

The continued recession in the eurozone’s third-largest economy is gloomy news for Italians, who have seen a series of austerity packages, tax hikes and pension charges.

The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.

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Moody’s cuts EU outlook to negative

 

Source: Russia Today

http://rt.com/news/moodys-eu-outlook-negative-293/

Moody’s ratings agency has downgraded its outlook on the Aaa rating of the European Union from ‘stable’ to ‘negative,’ linking the decision to a recent outlook downgrade of the bloc’s major economies.

"The negative outlook on the EU's long-term ratings reflects the negative outlook on the Aaa ratings of the member states with large contributions to the EU budget: Germany, France, the UK and the Netherlands, which together account for around 45 per cent of the EU's budget revenue," Moody’s said in a statement on Monday.

The agency also cut its outlook on the provisional (P)Aaa rating of the EU's medium-term note (MTN) program from ‘stable’ to ‘negative.’

The outlook downgrade comes after the agency changed to negative its outlook for Germany and Holland's Aaa ratings on July 23. Moody’s explained that it was reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states. The outlook on France and the UK are also negative.

Moody’s warned that it may downgrade the European Union's rating if it decides to cut the ratings of Germany, France, the UK and the Netherlands.

The agency also added that the outlook for the EU could go back to 'stable' if the outlooks on the four major European economies are first.

 

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