September 28, 2017 / 9:37 PM / 10 months ago

Fitch Reviews Global Trading and Universal Banks

(The following statement was released by the rating agency) LONDON/NEW YORK, September 28 (Fitch) Today Fitch Ratings concluded its periodic review of the Global Trading and Universal Banks (GTUBs). The peer group comprises 12 large and globally active banks. Fitch has affirmed the issuer ratings of 10 of the 12 GTUB parent entities. We upgraded UBS Group AG's Long-Term Issuer Default Rating (IDR) to 'A+' from 'A' to reflect our view that the group has improved its business by reducing tail risk, which should allow it to generate sound and less volatile earnings. We downgraded Deutsche Bank AG's Long-Term IDR to 'BBB+' because we see continued pressure on earnings, combined with a prolonged execution of its strategy. Following the review, the GTUB parent entities' Long-Term IDRs range from 'BBB+' for Deutsche Bank to 'AA-' for HSBC Holdings, with one GTUB parent (Credit Suisse Group AG) rated 'A-', three (BNP Paribas S.A., JPMorgan Chase & Co. and UBS Group AG) rated 'A+' and the others (Bank of America Corporation, Barclays plc, Citigroup, Inc., The Goldman Sachs Group, Inc., Morgan Stanley and Societe Generale S.A.) rated 'A'. All parent entities have Stable Outlooks. For detailed ratings and rationale, please refer to individual rating action commentaries released separately on each group. The GTUBs have streamlined group structures further as a result of resolution planning, and the groups have continued to build up debt buffers that protect certain senior creditors including counterparties and depositors. During the GTUB review, Fitch upgraded Societe Generale's senior preferred debt ratings to reflect the material size of the bank's debt buffers. We also assigned expected ratings to Barclays' and HSBC's domestic 'ring-fenced' banks, which the groups will have to establish to comply with UK legal requirements. Fitch expects that following the establishment of the new group structures, Barclays' two main operating companies' Long-Term IDRs will be rated one notch above their VRs and has therefore placed Barclays Bank Plc's Long-Term IDR on Rating Watch Positive (RWP). Fitch does not expect that the transfer of UK businesses will affect HSBC Bank plc's Long-Term IDR, which we affirmed at 'AA-'. We upgraded Societe Generale's senior preferred debt rating to 'A+', one notch above its Long-Term IDR, to reflect Fitch's view that the bank's buffer of additional tier 1, tier 2 and senior non-preferred debt is sufficient to recapitalise the bank after a resolution without causing losses to senior preferred creditors. We also upgraded the Derivative Counterparty Rating (DCR) by one notch and assigned deposit ratings at 'A+'/'F1' to reflect depositors' ranking as senior preferred creditors. The U.S. and Swiss GTUBs have had large debt buffers that protect operating company senior creditors for some time, and we rate the Long-Term IDRs, senior debt ratings and DCRs of several holding companies' operating subsidiaries one notch above the holding company's Long-Term IDR. Deutsche Bank's DCR and long-term deposit and structured notes ratings are one notch above the Long-Term IDR because derivatives, deposits and structured notes have preferential status over the bank's large buffer of qualifying junior debt and statutorily subordinated senior debt. Contact: Christian Scarafia Senior Director +44 20 3530 1012 Fitch Ratings Limited 30 North Colonnade London E14 5GN Bridget Gandy Managing Director +44 20 3530 1095 Joo-Yung Lee Managing Director +1-212-908-0560 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email:; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. 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