- CNTV English - CCTV News

Homepage > News > Biz >

Two biggest French banks downgraded by Moody's

09-15-2011 09:14 BJT

PARIS, Sept. 14 (Xinhua) -- Financial ratings agency Moody's downgraded on Wednesday the rating of two leading French banks, Societe Generale and Credit Agricole SA, while pinned the biggest BNP Paribas (BNPP) on review.

The U.S.-based agency has cut Credit Agricole's rating from Aa1 to Aa2 and Societe Generale from Aa2 to Aa3, citing Greek exposure for the former and funding and liquidity problems for the latter.

France's second-largest listed bank Societe Generale's "capital base currently provides an adequate cushion to support its Greek, Portuguese and Irish exposures," but its dependency on wholesale funding is a problem, Moody's concluded in a statement.

Meanwhile, Credit Agricole's ratings remain on review for possible downgrade, Moody's said, given "the potentially persistent fragility in the bank financing markets" could affect the group.

BNP Paribas has maintained the Aa2 long-term debt and deposit ratings by Moody's since June 15, 2011, which the rating agency said to extend for "a sufficient level of profitability and capital that it (BNPP) can absorb potential losses it is likely to incur over time on its Greek government bonds."

French banks have been put on edge since last month when rumors spread that France's sovereign debt rating was to be downgraded from AAA level due to heavy exposure to Greeke debt woes and its own high deficit.

French Economy Minister Francois Baroin and Central Bank Governor Christian Noyer have urged banks to disclose usually more detail of their financial situation to guard the market confidence. Shortly after the G7 financial ministers' gathering in southern France, Societe Generale has done that as requested, following BNPP.

"It's relatively good news, the downgrade is very limited," and the notes are "better" than expected, Noyer commented at Moody's downgrading on Wednesday.

"The level of capital and the profitability of French banks allow them to absorb all the potential losses on sovereign risks" in the context of the abnormal turmoil impacting the banking system, the central bank governor asserted.

Though excluding liquidity and solvency problems of French banks, Noyer meanwhile underlined the importance for the banks to keep on strengthening their capital equity to comply with Basel III rules.


Editor:Zhang Rui |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program