S&P cut rating to minor Australian banks and lenders

Posted: May 23, 2017 in Uncategorized

S&P decided to cut rating to over 22 minor lenders (including Bank of Queensland and Adelaide Bank).

This is a broad-brush move typical of the behaviour of S&P in the last few year. It takes a 10,000 meter view to the sector from new York and does not even care about the details.

The excuse to go was the high property price in Melbourne an Sydney. They did not even realised the lenders like bank of Queensland and Adelaide bank main loan book are not in Melbourne and Sydney (it is Queensland and regional Victoria…which are very far from the bubble level of Melbourne/Sydney and they have very little of the super-bubble apartment buildings).

Quite a bit off the mark, but typical of S&P (which, let’s not forget, brought us the GFC).

Also it did not take into account of the new levy on the big banks and Macquarie.

On one point it settles the argument about the levy. S&P did not downgrade the big banks as, it said, they are government guaranteed. So if they are practically government guaranteed it i only correct that they get charged with the levy. Actually,a s the levy is tax deductible, they should be charged more.


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