Skip to comments.Moody’s downgrades French Banks -- SocGen, Credit Agricole (BNP Paribas Under Review)
Posted on 09/14/2011 6:39:23 AM PDT by SeekAndFind
Moodys Investors Service on Wednesday downgraded French banks Credit Agricole SA and Societe Generale SA as the credit-rating company also said it has become increasingly concerned about the funding and liquidity needs of the lenders.
Moodys had said in June that it was considering downgrading Frances top three listed banks because of their exposure to Greek debt and said Wednesday that it is still reviewing BNP Paribas.
The announcements came after big swings for French-bank stocks in recent days amid reports that downgrades were imminent and as investors became increasingly nervous about the banks funding situation.
Shares in Credit Agricole rose 1% while SocGen dropped 4%. BNP Paribas fell 2.8% as the bank also announced plans to reduce its assets and cut its dollar funding needs.
Moodys cut its long-term debt and deposit rating on SocGen by one notch to Aa3 from Aa2 and said the outlook for the rating is negative.
Moodys said SocGen has enough capital to absorb potential losses on Greek-government bonds as well as a deterioration in the creditworthiness of Portuguese and Irish sovereign debt. However, it added that its reconsidered the level of potential government support it factors into its rating.
Credit Agricole was downgraded one notch to Aa2 from Aa1. The rating company said the bank has considerable capital resources to absorb potential losses, but the overall exposures were too large to be consistent with the previous rating.
In both cases, Moodys also highlighted the worsening funding and liquidity situation.
(Excerpt) Read more at marketwatch.com ...
The solution? Bail out Greece some more!/s