Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. were among Japanese banks that had their credit ratings cut by Standard & Poor’s following its downgrade of Japan, while Mitsubishi UFJ Financial Group Inc. was left unchanged.
The long-term ratings of Sumitomo Mitsui and Mizuho were lowered by one level to A-, the sixth-highest investment grade, S&P said in a statement Thursday. For Mitsubishi UFJ, Japan’s biggest banking group, the sovereign downgrade has “no direct impact,” in part because of its standalone credit profile, S&P said.
The action comes a day after S&P lowered Japan to A+, a level below neighbors China and South Korea, saying Prime Minister Shinzo Abe’s administration won’t be able to reverse a deteriorating outlook for economic growth and inflation. Part of a bank’s credit rating is based on the potential government support it may receive in a crisis.
The main lending units of Sumitomo Mitsui and Mizuho, Japan’s second- and third-largest banks, were also cut, along with several other financial institutions, with a stable outlook.