And while the bank bashing continued (rightfully) against the big four, there was good news for a couple of the regions and a bit of bad news for another, from the final round of re-ratings from Standard & Poor’s.
S&P last week trimmed the ratings of the big four to AA minus from AA as part of the re-rating of 700 banks around the world.
Yesterday it revealed that Bendigo and Adelaide Bank (BEN) had had its issuer credit rating upgraded from BB+ to A-.
And Suncorp Metway (SUN) was left unchanged on A plus. AMP Bank and Members Equity Bank also had their existing ratings reaffirmed.
But Bank of Queensland (BOQ) had its issuer credit rating downgraded from BBB+ to BBB, as the bank suffered a sharp rise in bad and non-performing loans in the 2011 financial year.
For Bendigo and Adelaide Bank the upgrade now means it is ‘A’ by all three of the world’s leading credit rating agencies (Moody’s and Fitch are the other two besides S&P).
Moody’s ‘A’ rating predates the merger of Bendigo and Adelaide banks.
Fitch upgraded the bank in May of this year.
The S&P upgrade has also been applied to BEN’s wholly owned subsidiary Rural Bank, which gains an ‘A-‘ rating with a stable outlook.
In welcoming S&P’s announcement, BEN’s managing director Mike Hirst noted that few banks in the world were being upgraded in the current difficult economic environment.
"That brings added lustre to our achievement, but it sounds a note of caution at the same time. We are obviously pleased to deliver on our stated aim to achieve an A rating from all credit agencies, but we are under no illusions about just how tough the economic environment is," he said.
BOQ chief executive Stuart Grimshaw said S&P’s outlook for the bank was stable.
"While obviously we are disappointed that S&P has lowered their long-term issuer credit rating on BOQ, as at 31 August 2011 our reliance on offshore wholesale funding was actually just 1.5 per cent of the bank’s total funding," he said in a statement yesterday.
"We believe BOQ remains a well capitalised Australian Bank with a strong funding and liquidity position."
And Suncorp Group CEO Patrick Snowball said the S&P decision demonstrated the stability of the Group and the strength of its balance sheet.
"Confirmation of the Bank’s ‘A+’ credit rating underscores the importance of the Suncorp Group model and the Bank’s core position within the Group," he said in a statement yesterday.
"The Bank is a critical part of our strategy and its rating benefits from its position within the strong and stable Suncorp Group," Mr Snowball added.
News of the re-ratings had a positive impact on the share prices of the three banks.
While the overall market was up half a per cent yesterday, Bendigo’s share price was up nearly 2%, or 18c at $9.52 on its upgrade.
Suncorp’s share price rose 1.5% or 13c to $8.51 with its rating steady.
And Bank of Queensland saw a 2% gain in its share price to $8.10 (a rise of 16c), despite the downgrade.
