Global bank credit ratings have remained stable, Fitch Ratings reports, with around three-quarters of its ratings on stable outlook.
Most of the negative ratings potential is in the developed markets, the rating agency says, with negative outlooks and watches representing 30.4% of ratings. By contrast, negative outlooks and watches comprise just 18.9% of emerging markets ratings.
That said, Fitch reports that negative trends are appearing in emerging market ratings. It says combined negative outlooks and watches in this region have doubled compared with the fourth quarter of 2011. Negative trends are concentrated in emerging Europe, it says.
Still, over two thirds (69%) of global downgrades during the third quarter occurred in developed markets; within these, Europe made up 45% of these moves, largely related to Italian and Spanish banks. Developed Asia also took a hit as major Japanese banks were downgraded due to the government’s weakened financial ability to support the banking system, it notes.
Upgrades are still few and far between, Fitch says. And, it notes that developed market banks are still much more highly rated than their emerging market counterparts.