Rating agency cuts six big banks

NEW YORK - Agence France-Presse

A lamp with a logo of Barclay’s bank is seen outside a branch in London. REUTERS photo

Ratings firm Fitch downgraded six major banks Thursday, citing increased challenges in their business and the prospect of financial turmoil ahead.

Fitch lowered the long-term ratings on Bank of America and Goldman Sachs in the United States, British bank Barclays, French bank BNP Paribas, Germany’s Deutsche Bank and Swiss bank Credit Suisse.

The downgrades “reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness,” Fitch said in a statement.

Fitch said the banks had made “significant progress” in building capital and liquidity buffers to withstand shocks. But they remained vulnerable to market sentiment and confidence.

The rating actions were based on its assessment of creditworthiness against the relatively high rating levels that the banks previously had, the agency said.

Bank of America, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS were rated ‘A.’ BNP Paribas and Societe Generale were ranked one notch lower, at “A-plus.”

Meanwhile, Standard and Poor’s downgraded Thursday the credit rating of 10 Spanish banks after applying new criteria, and warned it may lower their short-term scores further.

The change affected CaixaBank, Bankia, Banco Popular, Bankinter, Banco de Sabadell, the holding company Caja de Ahorros y Pensiones de Barcelona, Ibercaja Banco, San Caja de Ahorros y Monte de Piedad de Gipuzkoa y San Sebastian, Bilbao Bizkaia Kutxa and Banco Financiero y de Ahorros.