S&P: Riggs outlook negative

Standard & Poor's Ratings Services removed its ratings on Riggs National Corp and its commercial banking subsidiary, Riggs Bank NA, from CreditWatch developing, where they were placed on Nov. 11. The outlook is now negative.

Removed from watch were Riggs National Corp.'s B- counterparty credit rating and CCC subordinated debt rating, Riggs Bank NA's B+ counterparty credit rating and B+ CD rating and Riggs Capital and Riggs Capital II and III's D preferred stock ratings.

The ratings action reflects the announcement that Riggs' board rejected PNC Financial Services revised merger bid.

S&P said expenses related to the Bank Secrecy Act continue to hurt Riggs' performance. Riggs announced that it expects to lose about $60 million in the fourth quarter, which would bring year-to-date losses to roughly $100 million.

While Riggs has resolved most of their most pressing legal issues, S&P said legal and compliance expenses are expected to continue, albeit at a lower level. Until most of these problems are resolved, it will be difficult for Riggs to return to profitability.

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