Dutch banks, France downgraded
June 15, 2012
The policies of the new French President Francois Hollande could weaken the country's finances and increase its banks' need for help, Egan Jones Ratings said Friday.
As a result of this assessment, the number four among the big US ratings agencies lowered France's creditworthiness to BBB+ from A- and assigned a negative outlook that could herald future downgrades.
France's credit ratings as granted by the big three agencies - Moody's, Fitch and Standard & Poors (S&P) - are all several notches higher, but also include a "negative outlook."
Egan Jones said it expected rising borrowing costs for France as the eurozone debt crisis continued, combined with a greater need for support in the country's banking sector, .
In addition, French President Francois Hollande will be "under pressure to keep campaign promises which will ultimately hurt credit quality."
Netherlands moves into focus
In another round of ratings cuts, agency Moody's downgraded five Dutch banks on Friday. The banks are ING Bank, ABN AMRO, Rabobank, LeasePlan Corporation and SNS Bank.
Moody's said the banks' business was likely to remain difficult as a result of falling house prices in the Netherlands, owing to their large exposure to mortgages and inter-bank funding.
As a result, long-term debt and deposit ratings for Rabobank would be cut by two notches to Aa2, while ING and ABN AMRO would see a similar two-notch downgrade to A2. Ratings for Lease Plan and SNS Bank were both cut to Baa2.
Except ING Bank, which was assigned a negative outlook, all other banks were given stable outlooks, meaning their ratings are unlikely to change in the near future.
uhe/tj (dpa, AP)