BANK ACCOUNTS, CREDIT CARDS

Morningstar’s corporate credit ratings for UK banks

Morningstar has launched its corporate credit ratings for 25 global banks. It includes some of the top financial institutions in the UK such as HSBC, Standard Chartered, Barclays, RBS and Lloyds Banking Group.

The economic moats, a competitive analysis, track a bank's ability to handle stress-case scenarios and the overall solvency of the bank; this is what Morningstar's methodology considers when rating global banks.

Jim Leonard, Banking Credit Analyst at Morningstar Inc. commented on the latest Morningstar results for UK banks:

HSBC: A+

“HSBC is among the best-capitalised global banks, especially considering its lower-risk business model. However, the business is exposed to nearly every economy in the world, and the global slowdown has negatively affected its results.”

Standard Chartered: A+

“In our Stress Test analysis, we assigned an average underwriting rating for most of its loans and an above average rating for most of its securities. The company received a score of very good in the Stress Test as its strong initial capital levels experienced only a slight loss of capital under our stress-case assumptions.”

Barclays: A-

“Barclays came through the financial crisis in better shape than many of its peers, but it is having trouble gaining traction in the post-crisis world. The company has sought to shed unprofitable businesses in order to boost margins, but we are concerned that Barclays will remain overly dependent on its investment bank.”

Royal Bank of Scotland: BBB+

“In our Stress Test analysis, we assigned an above average underwriting rating for RBS's loans and securities. It achieved a poor Solvency Score due to its mediocre capital levels, lower reserves, recent poor earnings, and a higher balance of nonperforming loans.”

Lloyds Banking Group: BBB

“In our Stress Test, Lloyds received a score of very good. However, it achieved a very poor Solvency Score due to its mediocre capital levels, lower reserves, recent poor earnings, and a higher balance of nonperforming loans.”

This bank comparison might help Brits to make wiser decisions when choosing a bank branch or financial products such as bank accounts or credit cards in the future.

Tags: BANK ACCOUNTS, barclays, corporate credit ratings, CREDIT CARDS, HSBC, LLOYDS, rating global banks, royal bank of scotland, Standard Chartered