Fitch affirms Lloyds and RBS ratings

Fitch Ratings has affirmed the ‘A’ ratings for Lloyds Banking Group and Royal Bank of Scotland Group.

The move follows the agency’s recent downgrade of the UK sovereign outlook to “negative” from “stable”.

According to the agency, the affirmation is a reflection of the UK’s AAA status.

“This rating action addresses the issue of the potential change in the UK sovereign’s ability rather than the change in its propensity to support systemically important banks,” it reports.

The move, which affected the long-term issuer default ratings (IDRs) and support rating floors, saw the long-term IDRs given a “stable” outlook.

“However, downward pressure on the SRFs [support ratings floors] of systemically important banks in the UK could increase over time as a result of diminishing political will to support large banks as well as regulatory and legislative developments to minimise future support to large banking groups by making them more resolvable,” the agency added.