Fitch downgrades Macquarie
(14 March 2012 – Global) Ratings agency Fitch downgraded two of Macquarie Group’s credit ratings this week.
The downgrade was part of the agency’s review of the world’s largest financial institutions.
Macquarie and its subsidiaries, including Macquarie Bank, had both its long-term issuer default rating and its viability rating downgraded to A- from A, Fitch said in a statement on Tuesday.
The negative ratings watch placed on Macquarie in February has been removed.
The downgrade was due to the market-oriented nature of Macquarie's businesses, plus the group's reliance on wholesale funding, Fitch said.
'An uncertain global economic environment and increasing regulation mean that absolute returns from these businesses are likely to be subdued relative to pre-2008 levels in the short to medium term,' the agency said in the statement.
'Also, market-oriented businesses have a more volatile earnings profile than traditional commercial banking businesses.'
Fitch said Macquarie had been pro-active in addressing the changing economic environment, by exiting businesses, reducing costs and improving capital efficiency.
Fitch's review of global banking institutions, which led to a downgrade of its credit ratings for Commonwealth Bank, Westpac and National Australia Bank in February, was now complete, it said.
Macquarie and its subsidiaries, including Macquarie Bank, had both its long-term issuer default rating and its viability rating downgraded to A- from A, Fitch said in a statement on Tuesday.
The negative ratings watch placed on Macquarie in February has been removed.
The downgrade was due to the market-oriented nature of Macquarie's businesses, plus the group's reliance on wholesale funding, Fitch said.
'An uncertain global economic environment and increasing regulation mean that absolute returns from these businesses are likely to be subdued relative to pre-2008 levels in the short to medium term,' the agency said in the statement.
'Also, market-oriented businesses have a more volatile earnings profile than traditional commercial banking businesses.'
Fitch said Macquarie had been pro-active in addressing the changing economic environment, by exiting businesses, reducing costs and improving capital efficiency.
Fitch's review of global banking institutions, which led to a downgrade of its credit ratings for Commonwealth Bank, Westpac and National Australia Bank in February, was now complete, it said.
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