Standard & Poor's downgrades RBS credit rating

7th Nov 2013 14:21

Standard & Poor's said it had downgraded its credit ratings on Royal Bank of Scotland in the wake of the bank's decision to create an internal 'bad bank' to fence off its riskiest assets.The ratings agency said the bank's plans, which were unveiled last week, amounted to a material extension of RBS' long-running restructuring - further delaying its return to profitability.S&P pointed out the revised restructuring programme and its "associated large credit losses and execution risks" came at time of continued underperformance in the group's core business. It added: "In addition, considerable uncertainties remain regarding RBS' exposure to future litigation and conduct risk."The ratings agency cut its cut its long and short term ratings on RBS to 'A-/A-2' from 'A/A-1' with a negative outlook.RBS said it was "disappointed" by S&P's decision, but it did not expect the downgrade to have a material adverse impact on the liquidity of the group. Shares in RBS were down 0.8% at 325.4p at 15:06 on Thursday.TB