Ratings agency Moody’s has cut its credit rating for Australia’s big four banks, claiming their reliance on wholesale funding is the reason for a one-notch downgrade.
Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation Ltd (ASX:WBC), ANZ Banking Group (ASX:ANZ) and National Australia Bank Ltd (ASX:NAB) have maintained a Aa1 rating from Moody’s since 2007.
However, the agency has now delivered on its warning in February and lowered the long-term, senior unsecured debt ratings of Australia's big four to Aa2.
Moody's says the downgrade reflects its view of the Australian banking system's structural sensitivity to conditions in wholesale funding markets.
Commonwealth Bank’s group treasurer Lyn Cobley says at this point the bank does not expect the downgrade to have any material impact on its funding plans or expected pricing of its new debt issuance.
Commonwealth Bank recorded an interim net profit of $3 billion in the six months to the end of December 2010.
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$26.93 Sentiment: None Disclosure: Held
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