Moody's Considering Ratings Downgrade for RBS

Moody’s Investor Service is considering cutting the debt and deposit ratings of the Royal Bank of Scotland, it said in a release today.

“Moody's rating action follows the publication of a recent trading update, in which RBS's management indicated that the group's year-end 2013 results (scheduled to be published on 27 February 2014) would be materially impacted by additional provisions for pending litigations and conduct-related costs. As a result, the bank will report a weaker than previously anticipated regulatory capital position at end-December 2013, weakening its standalone credit profile," the Moody’s report said.

Cutting the deposit rating typically means the banks incur increased costs for their debt, as investors demand higher interest rates to compensate for this...