BNP Paribas, Crédit Agricole… Moody’s agency downgrades the rating of seven French banks

After France, it is the turn of the French banks to be sanctioned by Moody’s. The American rating agency downgraded the rating of seven French banks on Tuesday evening: BNP Paribas, Crédit Agricole SA, Crédit Agricole Corporate and Investment Bank, the regional banks of Crédit Agricole, Banque Fédérative du Crédit Mutuel (BFCM), CIC and Crédit Mutuel Arkea (CMA). The grades of all these establishments go from Aa3 to A1.

This decision “follows the downgrading of the French government’s rating”explains Moody’s in a press release. Last Friday, the agency lowered France’s sovereign rating, previously set at Aa2, accompanied by a “negative outlook” signaling a probable deterioration in the more or less short term, at Aa3 with «perspective stable».

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“Political fragmentation”

This action reflects Moody’s opinion “according to which France’s public finances will be significantly weakened over the coming years, as political fragmentation is more likely to hinder meaningful fiscal consolidation”explains the agency, due to the fall of the government and the open political crisis. “Uncertainty is increasing over the next government’s ability to reduce the deficit beyond next year”she adds.

This Wednesday midday, the prices on the Paris Stock Exchange of BNP Paribas (+1.27% to 58.88 euros) and Crédit Agricole (+0.96% to 13.14 euros) did not suffer from this deterioration. However, it is a safe bet that the political crisis will continue to cause turmoil on the markets, for which French banks could pay the price. Since the dissolution of the National Assembly in June, these establishments have suffered on the stock market. Their prices, which are very volatile, fluctuate according to new policies. Enough to accentuate their discount compared to the rest of the European sector.