(19 April 2010 – Australia) Ratings agency Moody’s has said that the Australian banking sector ranks amongst the highest globally as a result of weathering the global financial crisis well, emerging in strong condition.Patrick Winsbury, senior vice-president, Moody’s said that bad debts were showing signs of subsiding, profits were improving as economic conditions stabilised and banks had pumped up their capital levels.
Each of Australia’s big four banks have a current debt rating of Aa1 long-term and in the ratings agency’s latest update on the sector said that the outlook was stable overall for the nation’s banks.
However, as a result of the larger banks reliance on wholesale funding, Moody’s continues to give them a negative rating outlook. The ratings agency said it is due to their increased sensitivity to external shocks.