Moody's delays bank ratings downgrades

London: Moody's Investors Service is delaying ratings downgrades on more than 100 banks as it assesses the effect of JPMorgan Chase & Co's trading losses and a greater possibility of a euro breakup, a Moody's official said.

The Moody's official declined to be identified as he wasn't authorised to comment publicly. Moody's said on April 13 that it would begin downgrading banks, including BNP Paribas, France's biggest lender, Germany's Deutsche Bank and New York-based JPMorgan and Morgan Stanley, by early May. Yesterday, Moody's spokeswoman Kirsten Knight said the firm's schedule for "concluding bank rating reviews" hadn't changed.

"Moody's expects to conclude the reviews by the end of June," she said in an emailed statement. Moody's declined to elaborate beyond the statement or comment on when the first downgrade would occur.

It's the second time Moody's has delayed publishing details of the downgrades in a month. Any ratings cuts could push up bank funding costs, heaping further misery on the industry as the boost that followed the European Central Bank's cash injections in December and February wears off and policymakers struggle to extinguish the sovereign-debt crisis.

Moody's is overhauling the way it rates European banks and firms with global securities operations to reflect the adverse effects of the sovereign-debt crisis, dwindling economic growth and the latest round of capital rules set by the Basel Committee on Banking Supervision.

JPMorgan announced last week it was facing losses of $2 billion (Dh7.3 billion) related to derivatives trading, while Spain's government nationalised Bankia and forced lenders to increase provisions against real estate loans by €30 billion (Dh141 billion).