Fitch Ratings has affirmed the ratings of Barclays Bank plc, but revised its outlook to negative from stable.

At the same time, the agency has placed the rating of ABN AMRO Bank NV on Rating Watch Positive and affirmed its ratings. The rating actions follow today’s announcement by Barclays and ABN AMRO that they have agreed the terms of a potential merger.

The outlook revision for Barclays reflects the execution risks of a substantial cross border merger and of realising the 3.5 billion euros of synergies that will be needed in order to bring the performance of the combined group to a level in line with that of Barclays today.

The rating action for ABN AMRO reflects the likely benefit to its creditworthiness of a merger with higher-rated Barclays.