Moody’s downgrade West Bromwich debt rating
RATINGS agency Moody’s has announced it has downgraded its debt rating on the West Bromwich building society.
The downgrade is part of an overall assessment of the UK’s banking sector, during which the organisation has downgraded the debt repayment prospect of 12 of the country’s financial institutions.
Moody’s said it had reassessed the likely levels of systemic support the banks and building societies might expect to receive from the government.
It said announcements made and action taken by the government had “significantly reduced the predictability of support over the medium-to-long term”, which had affected banks of all sizes but put some of the smaller banks and building societies at greater risk.
The agency, which is one of three major worldwide credit rating bodies, said the government “is more likely now to allow smaller institutions to fail if they become financially troubled”.
Its statement indicated this was an issue of policy rather than one of necessity.
“The downgrades do not reflect a deterioration in the financial strength of the banking system or the government,” it said.
Lloyds TSB, Santander, RBS and Clydesdale banks were also downgraded, alongside building societies such as Nationwide, Newcastle, Norwich & Peterborough, Principality, Manchester-based Co-operative Group, Skipton and Yorkshire.
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