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Moody’s downgrades French banks

Moody’s has today downgraded the standalone bank financial strength rating (BFSR) of three French banks.

Société Générale has had its BFSR cut by two notches to C- from C+.

As a result, the bank’s long-term debt and deposit rating has been downgraded one notch to A1.

In the case of Crédit Agircole, the bank’s BFSR is down by one notch to C- from C and its long-term debt and deposit ratings by one notch to Aa3.

BNP Paribas has slipped two notches on its BFSR, to C from B-, with the lender’s long-term debt and deposit ratings down one notch to Aa3.

For all three banks, Moody’s says the actions reflect its view that the probability of systemic support remains very high.

Yesterday the European Banking Authority (EBA) estimated that eurozone banks need to raise between them almost €115 billion by June 2012.

The EBA wants to see capital positions strengthened with “exceptional and temporary” capital buffers against sovereign debt exposures.

French banks are some of the lower contributors to the total, with a collective shortfall of just over €7 billion.

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