Lloyds, RBS cut by Fitch on declining govt support

Lloyds, RBS cut by Fitch on declining govt support

London: Lloyds Banking and Royal Bank of Scotland, two of Britain’s government-backed lenders, had their credit ratings cut by Fitch Ratings, which said the UK is less likely to provide support in future.

Lenders are under pressure from regulators to raise capital that’s been depleted by writedowns of Greek and other European peripheral sovereign debt. Fitch follows Moody’s Investors Service, which downgraded 12 British lenders, including RBS and Lloyds on 7 October, and also cited a lessening of government support.

The government-sponsored Commission on Banking last month recommended banks insulate their consumer units from their investment banking divisions to make taxpayer support less likely in the event of a failure.

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