Fitch Ratings has downgraded the Long- and Short-term Issuer Default Ratings (IDRs) of The Royal Bank of Scotland Group (RBSG), of Royal Bank of Scotland Plc (RBS), of National Westminster Bank plc (NatWest), of Royal Bank of Scotland International Limited (RBSIL) and Royal Bank of Scotland NV to ‘BBB+’/F2’ from ‘A/F1’.

The Long and Short-term IDRs of RBSG’s US-based broker dealer, RBS Securities Inc. (RBSSI) have been downgraded to ‘BBB+/F2’ from ‘A-/F1’. The Outlook on the IDRs is Stable.

In line with its expectations announced in March last year and communicated regularly since then, Fitch believes legislative, regulatory and policy initiatives have substantially reduced the likelihood of sovereign support for senior creditors of UK banks, in line with developments at the EU level.

In a statement to the stock exchange, RBS said: “The rationale for downgrading these ratings is not RBS specific. Instead it relates to Fitch’s review of sovereign support for banks globally. Fitch believes legislative, regulatory and policy initiatives have substantially reduced the likelihood of sovereign support for senior creditors of UK banks, in line with developments at the EU level. As a consequence, Fitch has revised RBS’s “Support Rating” from ‘1’ to ‘5’. 

“RBS welcomes Fitch’s decision to improve its Viability Rating of the Royal Bank of Scotland Group plc and certain of its affiliates by one notch. This reflects Fitch’s recognition of the significant progress RBS has made in improving its overall risk profile and capital position. This improvement offsets in part the negative impact of Fitch removing sovereign support, as noted above.”