Australia: Moody’s downgraded the credit rating of 12 banks - TDS

Late yesterday, Moody’s downgraded the credit rating of 12 Australian banks, including the 4 major Australian banks, citing elevated risks in the household sector as the cause, notes the analysis team at NAB.

Key Quotes

“Specifically, the major banks (ANZ, CBA, NAB and Westpac) have their long term ratings cut from Aa3 to Aa2, while their BCAs were downgraded from a2 to a1. Short term ratings are unchanged. This cut comes one month after S&P reaffirmed credit ratings of the 4 major Australian banks but lowered long term issuer credit ratings on 23 Australian financial institutions on the back of elevated residential housing risks. Today, stock prices of the “Big Four” banks dipped average –0.4% today but credit spreads were relatively unchanged.”