BANK DOWNGRADE RAMPAGE: Goldman, Bank Of America, Morgan Stanley, Wells Fargo, And Citigroup Just Got Cut By S&P

November 30, 2011

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By Simone Foxman
Business Insider

Standard & Poor’s ratings service just cut the ratings of Goldman Sachs, Bank of America, Morgan Stanley and Citigroup from A to A-.

Wells Fargo was also cut from AA- to A+. The agency gave both Wells Fargo and Goldman Sachs have a negative outlook.

Those cuts were part of more than 37 ratings reviewed by the agency. Bloomberg says those are dependent upon “criteria change[s]” that were published on November 9.

Other banks mentioned in the report were RBS, HSBC, UBS, BBVA, Bank of New York Mellon, Barclays, and Lloyds.

The downgrade on Bank of America could cause the bank to scrounge around for up to $5.1 billion to meet collateral regulations.

These are a few more of the ratings actions in that report: BBVA (AA- to A+, negative), Banco Bradesco (still BBB, stable), Banco do Brasil (still BBB, stable), Banco Santander (still AA-, negative), Bank of America (A to A-, negative), Bank of New York Mellon (AA- to A+, negative), Barclays PLC (A+ to A-, stable), BNP Paribas (still AA-, stable), BPCE (still A+, stable), Citigroup (A to A-, negative), Commerzbank (still A, negative), Credit Agricole (still A+, stable), Credit Suisse (still A+, now negative outlook), Deutsche Bank (still A+, now negative outlook), Goldman Sachs (A to A-, negative), HSBC (AA- to A+, stable), ING Groep (still A, stable), Intesa Sanpaolo (still A, negative), Itau Unibanco (still BBB, stable), JP Morgan Chase (A+ to A, stable), Lloyds (A to A-, stable), Mitsubishi UFJ Financial (still A, stable), Mizuho Financial (still A, now negative outlook), Morgan Stanley (A to A-, negative), Nordea Bank (still AA-, stable), RBS (A to A-, stable), Societe Generale (still A+, stable), State Street (still A+, now negative outlook), Sumitomo Mitsui Financial (still A, now negative outlook), UBS (A+ to A, negative), UniCredit (still A, negative), and Wells Fargo (AA- to A+, negaitve).

This press release preceded the cuts (via WSJ):

Standard & Poor’s Ratings Services today said it reviewed its ratings on 37 of the largest financial institutions in the world by applying its new ratings criteria for banks, which were published on Nov. 9, 2011. See the Ratings List for the ratings on these banks, their core and highly strategic subsidiaries, and other subsidiaries that we took rating actions on as a result of applying our new criteria to their parents. We will review all ratings that we placed on CreditWatch within 90 days. Ratings on CreditWatch are designated as Watch Neg or Watch Pos in the list below.

We will publish individual research updates on the bank groups identified below, including a list of ratings on affiliated entities, as well as the ratings by debt type — senior, subordinated, junior subordinated, and preferred stock. The research updates will be available at www.standardandpoors.com/AI4FI and on RatingsDirect on the Global Credit Portal. Ratings on specific issues will be available on RatingsDirect on the Global Credit Portal and www.standardandpoors.com.