US & European Banks : Did you make the long list?

Note: This exclusive realisation, brought about by our re-scanning at day end on FT alphaville

Moodys’ seemingly gave indications that it will be reassessing banking companies, securities firms with Credit operations for both US and European Banks. Where banks have a securities firms they will be assessed twice

What the announcements below mean, according to the Alphaville team that attended the press event is that Credit Suisse and UBS will likely go down 3-4 notches, Morgan Stanley willl likely go down 3 notches, Barclays, Deutsche Bank, HSBC, Macquarie and RBC along with Citi, Goldman Sachs and JP Morgan are due for a 2 step correction ( 2 notches) and BankAm, Nomura, SocGen and RBS likely to be pushed down by one rating each

In sum total this is the impact of a weak Europe, and those holding European debt will be affected,

The actions reflect, to differing degrees, the combined pressures from (i) the adverse and prolonged impact of the euro area crisis, which makes the operating environment very difficult for European banks; (ii) the deteriorating creditworthiness of euro area sovereigns, which led to the adjustment of the ratings for nine European sovereigns on 13 February 2012http://www.moodys.com/EUSovereign; and (iii) longer-term, the substantial challenges faced by banks and securities firms with significant capital market activities.

and for global banks a recognition of difficult operating conditions having a cycleback effect ont heir everyday operations

Underpinning this review is Moody’s view that these firms face challenges that are not fully captured in their current ratings. Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions. These difficulties, together with inherent vulnerabilities such as confidence-sensitivity, interconnectedness, and opacity of risk, have diminished the longer term profitability and growth prospects of these firms.

In the case of European banks, the coming downgrades will be a result of the following review actions after the sovereign downgrade:

IMPACT OF THE EURO AREA CRISIS ON EUROPEAN BANKS

(i) For 99 financial institutions, the standalone credit assessments have been placed on review for downgrade.

(ii) For 109 institutions, the long-term debt and deposit ratings have been placed on review for downgrade.

(iii) For 66 institutions, the short-term ratings have been placed on review for downgrade.

AFFECTED EUROPEAN FINANCIAL INSTITUTIONS BY COUNTRY

The financial institutions affected by this announcement are headquartered in the following countries (counted by group and listed by parent domicile): Austria (8), Belgium (1), Denmark (8), Finland (1), France (10), Germany (7), Italy (24), Luxembourg (1), Netherlands (6), Norway (1), Portugal (6), Slovenia (4), Spain (21), Sweden (5),Switzerland (2), UK (9).

In the case of global banks and securities firms with global capital market operations:

Moody’s Investors Service has announced a review of 17 banks and securities firms with global capital markets operations. Underpinning this review is Moody’s view that these firms face challenges that are not fully captured in their current ratings.

Specifically, Moody’s has taken the following actions with regard to the long-term ratings and standalone credit assessments of the 17 global banks and securities firms:

- For 6 firms, placed long-term ratings on review for downgrade

- For 4 firms, extended reviews for downgrade that had been announced prior to today

- For 7 firms, extended reviews for downgrade initiated with today’s earlier announcement on European banks

because banks are likely to decline in 2012 ( Earlier report)

 

 

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