Fitch lowers Washington Federal

Fitch Ratings said it downgraded the long- and short-term issuer default ratings of Washington Federal Inc. to BBB+/F2 from A-/F1 and its individual rating to B/C from B. Ratings have been removed from Rating Watch negative.

The outlook is negative.

Fitch said the downgrade reflects the sizable growth of non-performing assets during the quarter with expected further pressures on operating performance going forward.

Washington Federal's continued resilient operating performance, despite building reserves, is viewed positively, the agency said, as well as management's focus on containing costs, as evidenced by the efficiency ratio.

Despite these positive factors, weakness in the overall economy is starting to result in a higher level of delinquent loans in the larger residential loan book, the agency noted.

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