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Aus banks hit by S&P downgrades

Friday 2 December 2011 - by

Australia's four biggest banks have failed to avoid rating downgrades after Standard & Poor's revised the way it assesses major institutions.

S&P announced a one-notch downgrade for the Commonwealth Banking Group, Westpac Banking Corporation, Australia and New Zealand Banking Group and National Australia Bank on Thursday.

The move, which cuts the banks' ratings to AA- from AA, follows similar downgrades for a number of the world's largest banks. It comes after S&P revised its rating methodology earlier in November, changing the way it assesses risk associated with investment banking, methods of funding, levels of liquidity and capital standards.

The news also comes just days after Australia was awarded an upgrade to AAA on its sovereign rating by fellow agency Fitch. The country joins an elite list of nations ranked at the highest possible level by the three major rating agencies.

S&P said on Friday that the overhaul of its ratings criteria did not lead to any changes for the five South African and five Nigerian banks it rates.

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