Concerns about the Greek debt crisis spreading across Europe have been mounting in recent weeks and Moody's, one of the three main credit ratings agencies, has downgraded the ratings of 12 UK financial institutions including some of our biggest high street banks and building societies: Lloyds Banking Group, Nationwide Building Society, RBS and Santander have all had their ratings cut.
The downgrades don't mean customers should panic. Moody's said the decision was not because it believes the financial strength of these institutions has deteriorated but because it believes the UK government is less likely to be able to support firms if they run into difficulty.
However, if you are worried, it's important to note that under the terms of the Financial Services Compensation Scheme, the first £85,000 held with a single institution is totally guaranteed (£170,000 for joint accounts). For more information on this and advice on how to keep your savings safe, read our article 'Who owns who?'.
The table below also shows the ratings given to the country's major savings providers by the three main ratings agencies, Moody's, Standard & Poor's and Fitch..
How are institutions rated?
As you will see from the table below, the agencies vary in the way they present their ratings. However, broadly speaking the purpose of their rankings is to evaluate the financial strength of the institution based on its ability to meet its financial commitments. And they all rate strength in a similar way - an A-rated company is deemed to be stronger and less risky than an C-rated institution.
These ratings are usually used by institutional investors; they can be very confusing for the consumer. However, given the current crisis, if you want to learn more about how your bank is rated, we've compiled a table to help you.
The basics:
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The highest rating is AAA.
-
Moody's uses numbers as well as letters. The number '1' after a letter symbolises a stronger company than a number 2 or 3.
-
Fitch and Standard & Poor's, on the other hand, use plus and minus signs after the letters.
-
A triple rating (AAA, BBB, CCC etc) of the same letter is always better than a double rating (AA, BB, CC etc), regardless of the number or plus/minus symbol that comes after it. For example, BBB- is a better rating than BB+. But an A- is a better rating than a BBB+.
The table below shows the ratings awarded by the three main ratings agencies. Please note that the agencies don't rate all providers - we have included those that are available. This articles was originally published in April 2009. The information is correct as of October 7, 2011.
|
Provider |
Parent company & country of origin |
Maximum level of protection |
Rating:
Fitch |
Rating:
Moody's |
Rating:
Standard & Poor's |
|
Santander
(formerly Abbey)
Alliance & Leicester
ASDA
Bradford & Bingley
Cahoot |
Banco Santander, Spain |
£85,000 (in total) |
AA- |
Aa3 |
AA |
|
Anglo Irish Bank |
Anglo Irish Bank plc, Ireland |
€100,000 (about £85,000) will be guaranteed under the Irish Deposit Guarantee Scheme. Remaining amount covered by the Irish Government's Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 |
BBB |
Ba1 |
CCC |
|
Bank of Cyprus UK |
Bank of Cyprus, Cyprus |
Cypriot Deposit Protection Scheme covers up to €100,000 (about £85,000) |
BBB- |
Ba1 |
- |
|
Bank of Scotland
The AA
Birmingham Midshires
Halifax
Intelligent Finance
Saga |
Lloyds Banking Group, UK |
£85,000 (in total) |
A |
A2 |
A |
|
Bank of Ireland
Bristol & West |
Bank of Ireland, Ireland |
€100,000 (about £85,000) will be guaranteed under the Irish Deposit Guarantee Scheme. Remaining amount covered by the Irish Government's Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 |
BBB |
Ba1 |
BB+ |
|
Barclays
Woolwich |
Barclays Bank plc, UK |
£85,000 (in total) |
AA- |
Aa3 |
AA- |
|
Britannia Building Society 3 |
The Co-operative Bank plc, UK 3 |
£85,000 3 |
A- |
A3 |
- |
|
Capital One |
Capital One Bank (Europe) plc, UK |
£85,000 |
A |
A3 |
- |
|
Chelsea Building Society |
Yorkshire Building Society, UK |
£85,000 |
A- |
Baa2 |
- |
|
Citibank |
Citigroup Inc. USA |
£85,000 |
A |
A3 |
A |
|
Clydesdale Bank
Yorkshire Bank |
National Bank Group, Australia |
£85,000 (in total) |
AA |
Aa2 |
AA |
|
Egg |
Citigroup Inc. USA |
£85,000 |
A |
A3 |
A |
|
FirstSave Bank of Nigeria |
Bank of Nigeria, Nigeria |
£85,000 |
B+ |
- |
B+ |
|
HSBC
First Direct |
HSBC Bank plc, UK |
£85,000 (in total) |
AA |
Aa2 |
AA |
|
ICICI Bank |
ICICI Bank Limited, India |
£85,000 |
BBB- |
Ba1 |
BBB- |
|
ING Direct
Kaupthing Edge2
Heritable Bank2 |
ING Direct N.V, Netherlands |
Netherlands Depositors' Compensation Scheme covers up to €100,000 (about £91,000)
2 ING Direct took over Kaupthing Edge & Heritable Bank's online deposit accounts |
A+ |
Aa3 |
A+ |
|
Laiki Bank |
Marfin Popular Bank (Cyprus) |
Cypriot Deposit Protection Scheme covers up to €100,000 (about £85,000) |
BBB |
Ba2 |
- |
|
Leeds Building Society |
Leeds Building Society, UK |
£85,000 |
A |
A3 |
- |
|
Lloyds TSB
Cheltenham & Gloucester |
Lloyds Banking Group, UK |
£85,000 (in total) |
A |
A2 |
A |
|
Marks & Spencer Money |
Marks & Spencer Financial Services plc & HSBC, UK |
£85,000 |
BBB |
Baa3 |
BBB- |
|
NatWest |
Royal Bank of Scotland plc, UK |
£85,000 |
A |
A2 |
A |
|
Nationwide 3
Cheshire Building Society 3
Derbyshire Building Society 3 |
Nationwide Building
Society, UK 3 |
£85,000 3 |
AA- |
A2 |
A+ |
|
Newcastle Building Society |
Newcastle Building Society, UK |
£85,000 |
BBB- |
- |
- |
|
Northern Rock |
Bank of England/HM Treasury |
All deposits backed by UK Government |
BBB+ |
AAA |
AAA |
|
Norwich & Peterborough Building Society |
Norwich & Peterborough Building Society, UK |
£85,000 |
BBB+ |
- |
- |
|
Post Office |
Bank of Ireland (UK) plc, EIRE |
£85,000 |
BBB |
Ba1 |
BB+ |
|
Principality Building Society |
Principality Building Society, UK |
£85,000 |
BBB+ |
- |
- |
|
Rothschild Reserve |
N M Rothschild & Sons Limited, UK |
£85,000 |
A- |
- |
- |
|
Royal Bank of Scotland
Direct Line |
Royal Bank of Scotland plc, UK |
£85,000 (in total) |
A |
A2 |
A |
|
Scarborough Building Society 3 |
Scarborough Building Society, UK 3 |
£85,000 3 |
- |
- |
- |
|
Skipton Building Society 3 |
Skipton Building Society, UK 3 |
£85,000 3 |
A- |
Baa1 |
- |
|
Standard Life Bank |
Standard Life Bank Plc, UK |
£85,000 |
BBB+ |
Baa1 |
A- |
|
State Bank of India |
State Bank of India, India |
£85,000 |
BBB- |
Ba1 |
BBB- |
|
The Co-operative Bank 3
Smile |
The Co-operative Financial Services, UK 3 |
£85,000 (in total) 3 |
A- |
A3 |
- |
|
Tesco Personal Finance |
Tesco plc, UK |
£85,000 |
A- |
A3 |
A- |
|
West Bromwich Building Society |
West Bromwich Building Society, UK |
£85,000 |
BBB- |
B2 |
- |
|
Yorkshire Building Society 3 |
Yorkshire Building Society, UK 3 |
£85,000 3 |
A- |
Baa2 |
A- |
1 Akbank N. V. is a wholly owned subsidiary of Akbank T.A.S, Turkey.
2 ING Direct took over Kaupthing Edge & Heritable Bank's online deposit accounts in 2008.
3 Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society are trading divisions of Nationwide Building Society. Skipton and Scarborough building societies merged on March 30, 2009. Britannia Building Society is a trading name used by The Co-operative Bank plc.
The above list is not inclusive. For further information visit the FSA website.
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