RBS and Lloyds’ credit ratings downgraded by global finance experts

Royal Bank of Scotland and Lloyds are among dozens of the world’s largest financial institutions whose credit ratings have been downgraded, it emerged last night.

The changes could make it more expensive for banks to borrow money, leading to fears higher costs could be passed on to customers.

Standard and Poor’s (S&P), one of the financial world’s top three credit ratings agencies, said it was adjusting the ratings of 37 institutions, including the biggest banks in the US.

Other UK banks to be hit were Barclays and HSBC. Lloyds and RBS both had their ratings changed from A+ to A.

S&P said the changes reflected its new ratings criteria, which incorporate shifts in the worldwide financial industry and macroeconomic trends, including the role of governments and central banks in industry funding.

A spokesman for RBS said: “RBS has made significant progress in strengthening its credit profile since 2008 and welcomes S&P’s recognition that the group has ‘established the foundations to achieve further steady progress’.”

A spokesman for Lloyds Banking Group said: “These amendments have resulted in a reassessment of ratings across the global banking industry and will be applied to approximately 1,000 banks in total. We do not expect this rating action to have a material impact on our funding position and S&P has confirmed that Lloyds’ short-term funding rating remains unchanged.”