S&P cuts Riggs ratings

Standard & Poor's said it lowered its ratings on Riggs National Corp. and its commercial banking subsidiary, Riggs Bank NA, including Riggs' long-term counterparty credit rating, which was lowered to B+ from BB.

The outlook remains negative.

"The ratings actions reflect Riggs' continued poor profitability and the uncertain regulatory environment," said S&P credit analyst Michael Driscoll. "Future profitability looks weak despite the announced business restructuring that will result in the exiting of the unprofitable international businesses. The loss of core deposits, the higher costs of doing business associated with regulatory actions, and branch expansion will all hurt profitability in the short term."

Riggs' negative outlook reflects continued profitability pressures and regulatory uncertainty. Riggs is expected to report a substantial loss for the second quarter, but if Riggs does not return to marginal profitability during the second half of the year, the ratings could be lowered, S&P said.

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