Big four given ratings warning

by Adam Smith31 Jan 2012

Fitch has placed the Australian majors on notice over their ratings amid funding concerns.

The ratings agency has placed Commonwealth Bank, Westpac, ANZ and NAB on ratings watch negative, but said any rating moves should happen quickly. Fitch praised the strength of Australian banks, while saying their ratings were "under some pressure at their current levels".

"Specifically, the [ratings watch negative] for the four major Australian banks largely reflects Fitch's view that despite significant improvements, these banks continue to have a weaker funding profile than other similarly rated peers," the company said.

Nevertheless, Fitch called Australia's majors "some of the highest rated banks in Fitch's universe", and said their high ratings were justified. Should the big four be subject to a downgrade, Fitch said it the banks' ratings would likely move only "one notch".

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