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RETAIL BANKING | Cesar Tordesillas, China
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Only 2 Chinese banks get S&P upgrade

Only two Chinese banks, Bank of China and China Construction Bank, were upgraded by Standard&Poor's, reports Xinhua News.

 

The ratings agency adjusted ratings on 37 of the world's largest financial institutions as part of a process of "applying its new ratings criteria for banks. It "downgraded several giant global banks, including six major U.S. financial institutions: JP Morgan Chase, Goldman Sachs, Bank of America, Morgan Stanley, Citigroup and Wells Fargo.

Rabobank's loss of its position as the world's only privately-owned bank with a AAA status from Standard & Poor's  came as no surprise, the bank's chief financial officer said.

"We knew this was coming," Bert Bruggink was quoted by Dutch broadcaster NOS as saying. "We also knew they were working on a new methodology for more than a year. We expected it was inevitable banks would lose the triple A status. We are still a creditworthy bank. Double A is the new triple A."

Rabobank was awarded AA with a 'stable outlook,' still the highest among all 37 top global banks.

The new S&P rating methodology focuses more on market and economic conditions in which the bank acts and on the likelihood that governments provide extraordinary support to troubled institutions.

"It is clear the conditions in the eurozone are bad," said Bruggink. "The pressure is rising and the effects on the real economy will increase."

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