Australia’s big four banks have had their credit ratings downgraded by Standard & Poor’s as the agency changes its criteria for assessing banks.
But Fitch Ratings says the nation’s banks are well positioned to meet new, stricter global regulatory requirements that the banking regulator will enforce.
Westpac Banking Corporation, Commonwealth Bank of Australia, ANZ Banking Group and National Australia Bank all had their issuer credit ratings downgraded by one notch from AA to AA minus by S&P.
Macquarie Group had its long-term rating downgraded from A minus to BBB.
The move by S&P follows downgrades to its ratings of 37 of the largest banks around the world earlier this week.
The agency indicated in February that the banks may have their ratings downgraded as a result of its review of ratings criteria.
Commonwealth group treasurer Lyn Cobley said the bank remained one of very few banks globally in the AA category.
“Since the onset of the financial crisis in 2008, the group has increased its capital base and improved its funding and liquidity position by increasing customer deposits and long-term wholesale debt and reducing our use of short-term wholesale funding,” she said in a statement.
“At this point we do not expect this to have any material impact on our funding plans or expected pricing of our new issuance.”
NAB chief executive Cameron Clyne said the bank was highly rated by global standards, well capitalised with strong funding and liquidity positions, and remained well placed to continue to support customers.
Fitch said in a statement that new liquidity rules, to be brought in as part of the Basel III international banking framework, posed a challenge that was surmountable for the local banks.
The new regulations require banks to hold enough cash or similarly liquid security to meet requirements over a 30-day period of acute stress, known as the liquidity coverage ratio.
Basel III also requires banks to have enough funding to support operations over a year of less severe stress, known as the net stable funding ratio.
These requirements could be met as there was a long lead time to the introduction of the regulations by the Australian Prudential Regulation Authority.
The Reserve Bank of Australia’s decision to introduce a liquidity facility that would be available in times of acute stress had also made it easier for the banks to meet the new requirements.
