RBS Credit Rating Downgraded by S&P on Bad Bank Unit
“The changes amount to a material extension of RBS’s long-running restructuring, further delaying the bank’s return to profitability,” the ratings company said in a statement today. “In addition, considerable uncertainties remain regarding RBS’ exposure to future litigation and conduct risk.”
S&P downgraded RBS’s long-term debt rating by one step to BBB+ from A-. RBS said last week the bad bank unit would include 38 billion pounds ($61 billion) in toxic assets including 14.8 billion pounds being transferred from the core unit and 23.5 billion pounds from its non-core division.
It also cut the long-term rating of the bank’s Royal Bank of Scotland Plc unit by one step to A-, four levels above junk, and maintained a negative outlook.
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