Credit rating trends for global banks improved slightly in the fourth quarter of 2012, but there is still little chance of upgrades, suggests Fitch Ratings.
In a new report examining global rating trends, Fitch says that the proportion of banks with a stable outlook rose to 75% of global ratings in the fourth quarter, up from 73% in the previous quarter. However, it also notes that positive potential is still minimal, with just 3% of banks carrying positive outlooks or on rating watch positive.
“Looking back over four quarters, improvements are barely visible and it is too early to be optimistic about trends as a stubbornly high 20% of global bank ratings assigned by Fitch have negative outlooks,” it notes. The negative rating potential is highest in the developed markets, with combined negative outlooks and rating watch negative positions representing 27% of global bank ratings, compared with just 16% for emerging markets.
The number of downgrades matched upgrades in the fourth quarter, it says. However, it notes 60% of global downgrades were in developed markets (several linked to the downgrade of HSBC Holdings plc) while around 90% of upgrades were in emerging markets. European banks led the way for developed market downgrades in Q4, it says, with the ratings of Spanish, Italian and French banks under pressure.