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Fitch downgrades Westpac and ANZ

Fitch downgrades Westpac and ANZ

(17 July 2019 – Australia) Credit rating agency Fitch has downgraded the outlook for Westpac and ANZ from ‘stable’ to ‘negative’ in the wake of the latest capital demands from the prudential regulator.

The change in the lenders' Long-Term Issuer Default Rating stemmed from greater capital requirements sought by the prudential regulator, Fitch said in a statement.

Last week, the Australian Prudential Regulation Authority (APRA) told the three biggest banks to each set aside a further $500 million until they strengthened risk management and reimbursed customers for wrongly charged fees.

Fitch said the APRA move indicated "material shortcomings in operational risk management, which were not aligned with the assessment Fitch had previously incorporated into its ratings".

Fitch affirmed both banks' ratings at 'AA-'.

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