Lux bank could see credit rating rise
(JB) Given the current global financial turmoil, banks are warier than ever about possible down gradings to their credit rating.
Not the Luxembourg's BNP Paribas subsidiary BGL BNP Paribas (BGL BNPP), however, which could be in-line for a debt rating promotion from Moody's.
While banks elsewhere are struggling to retain their ratings, the financial institution in Luxembourg is being “positively monitored” and, pending an analysis from the US credit agency, could see itself rising in the rankings.
In announcing their plans Moody's highlighted BGL BNPP's good financial strength and its liquidity as a result of the volume of customer deposits compared with loans. It added that the institution had fully integrated into the BNP Paribas Group, strengthening its place among the top three main banks in Luxembourg.
Regarding exposure to eurozone debt and the level of risk assets, Moody's said in a statement that BGL BNPP had shown excellent results. Moody's is also reportedly considering raising the rating of the Belgian subsidiary of BNP Paribas Fortis, which is a shareholder of BGL.
BGL's press spokeswoman Anne Wenandy said: “We are satisfied with the decision by Moody's, which proves our inherent strength.”
The news could prove beneficial to the bank's customers as the rating of a bond issuer has a direct impact on the interest rates offered.
BGL BNP Paribas' positive result comes after Luxembourg's national bank, the BCEE, was rated eighth safest bank in the world by financial magazine Global Finance, earlier this month.