Fitch reviews Australian banks

Fitch Ratings said that in conjunction with its broad review of the largest banking institutions in the world, it has placed four major Australian banks on Rating Watch negative.

Australia & New Zealand Banking Group's AA- long-term issuer default rating, F1+ short-term issuer default rating, aa- viability rating, AA- senior debt and A+ subordinated debt are on Rating Watch. Its 1 support rating, A support rating floor and AAA government-guaranteed debt were affirmed.

Commonwealth Bank of Australia's AA long-term issuer default rating, aa viability rating, AA senior debt, AA- subordinated debt and A preferred stock are on Rating Watch. Its F1+ short-term issuer default rating, 1 support rating, A support rating floor, AAA government-guaranteed debt and F1+ short-term debt were affirmed.

National Australia Bank Ltd.'s AA long-term issuer default rating, aa viability rating, AA senior debt, AA- subordinated debt and A preferred stock are on Rating Watch. Its F1+ short-term issuer default rating, 1 support rating, A support rating floor and AAA government-guaranteed debt were affirmed.

Westpac Banking Corp.'s AA long-term issuer default rating, aa viability rating, AA senior debt, AA- subordinated debt, AAemr market-linked debt and A hybrid capital are on Rating Watch. Its F1+ short-term issuer default rating, 1 support rating, A support rating floor and AAA government-guaranteed debt were affirmed.

Fitch said the banks are some of the highest rated banks in its rating universe, and the agency believes the four are justifiably highly rated. Nevertheless, the agency's Rating Watch negative largely reflects its view that despite significant improvements, these banks continue to have a weaker funding profile than other similarly rated peers.

The agency expects that any downgrades of the four banks' ratings are most likely to be limited to one notch.

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