BNP Paribas SA (BNP), Credit Agricole (ACA) SA and Societe Generale SA (GLE), among 15 global banks downgraded by Moody’s Investors Service, have “weaker” funding than many of their large competitors, the ratings company said.
“There is one common factor which does distinguish them, that’s the financing and liquidity structures, which we see as weaker than many other banks,” Nicholas Hill, senior vice president at Moody’s in Paris, said in a telephone interview today. “Many of the 15 banks have more deposits than loans and more liquidity on their balance sheets.”
The possibility of the downgrades had weighed on the banks since Moody’s said Feb. 15 it was reviewing 17 banks with capital-markets operations because of fragile confidence and tighter regulations that pinched revenue. Pressure has mounted as Europe’s sovereign-debt crisis intensified and cast doubt on the health of some of the continent’s lenders.
BNP Paribas, France’s largest bank, has a “strong liquidity profile” with 201 billion euros ($252 billion) liquid asset reserves as of the end of March, the Paris-based bank said in an e-mailed statement today. BNP Paribas has 51 billion euros of “excess stable resources against customer funding needs,” it said.
BNP Paribas’s long-term senior unsecured debt rating was reduced two grades to A2, Societe Generale’s was lowered one level to A2 and Credit Agricole was cut two steps to A2. While BNP’s and Societe Generale’s have stable outlooks, Moody’s gave Credit Agricole a negative outlook.
Officials at Credit Agricole, based near Paris, and Societe Generale declined to comment on Moody’s decision.
BNP Paribas was 1.4 percent lower at 29.21 euros as of 1:36 p.m. in Paris, Societe Generale was 2.3 percent higher at 18.15 euros and Credit Agricole was up 2.1 percent at 3.41 euros. Before today, BNP Paribas had fallen 3.8 percent this year, Societe Generale had risen 3.1 percent and Credit Agricole had tumbled 23 percent.
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