S&P lowers BNP Paribas rating to AA-
Standard and Poor's lowered Friday the rating of French bank BNP Paribas one notch to AA-, citing funding and liquidity concerns, but held the ratings of the country's other top banks steady.
The ratings for Credit Agricole, Societe Generale, BPCe, Credit Mutuel Caisse Central and Credit Mutuel Federation Bank were held at the lower rating of A+.
Standard and Poor's lowered the stand-alone credit profiles (SACP) of these banks, but increased its estimate of the government support they would likely receive in case of difficulty.
"The downgrade of BNP Paribas ... and the lowering of our SACPs on the four other banks primarily reflect our opinion that the financial profiles for all of these banks have weakened as a result of more difficult economic and funding market conditions ahead," said the ratings agency.
"We see that their funding and liquidity positions have become more vulnerable to adverse conditions than we had previously anticipated," it added.
European banks have found it diffucult to raise financing on the markets as investors have grown concerned about their exposure to the sovereign debt of weaker eurozone states.
S&P said the tighter funding conditions would weigh on their earnings and were pushing the banks to reduce their balance sheets.
© 2011 AFP