Santander: keep Calm and Carry On

SnowTiger

Just logged off my Santander account and was greeted with the following message:

You may have seen some coverage about Santander in the news recently, following the decision by the credit rating agency, Moody's, to move Santander UK's long-term credit rating from A1 to A2. We would like to reassure customers that they have nothing to be concerned about and that we are a strong business focused on retail banking, as noted by the ratings from the other two rating agencies, Fitch: A+ and S&P: A.

There has also been a lot of media coverage recently on problems in the eurozone and some customers have asked us what this means for Santander UK. Santander UK plc operates under a subsidiary model, which means we are self-sufficient and operate on a standalone basis. Our funding, liquidity and capital is managed in the UK independently from our Spanish parent company. Santander UK remains firmly focused on the UK with around 90 per cent of the balance sheet UK-related, with the non UK elements of our balance sheet related largely to US liquid assets. Our exposure to Europe amounts to less than 1 per cent of our total assets.

Santander UK plc is regulated by the UK regulator - the Financial Services Authority - and all deposits up to £85,000 are covered under the rules of the Financial Services Compensation Scheme.

MoneySaverLog

Fitch and S&P ratings start at AAA, they make it sound good using A+ and A though in reality it's not such a good rating.

e.g. A S&P rating of A is "Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances." *

* Source: http://www.standardandpoors.com/ratings/definitions-and-faqs/en/us

SnowTiger

MoneySaverLog wrote: »

Fitch and S&P ratings start at AAA, they make it sound good using A+ and A though in reality it's not such a good rating.

e.g. A S&P rating of A is "Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances." *

* Source: http://www.standardandpoors.com/ratings/definitions-and-faqs/en/us

I have more confidence in Santander UK than credit ratings made up by S&P, although it is interesting that Santander has commented on the downgrade in this way. Lots of telephone calls from concerned customers during the past few days, perhaps?

callum9999

MoneySaverLog wrote: »

Fitch and S&P ratings start at AAA, they make it sound good using A+ and A though in reality it's not such a good rating.

e.g. A S&P rating of A is "Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances." *

* Source: http://www.standardandpoors.com/ratings/definitions-and-faqs/en/us

As the people worrying about this are generally clueless on the matter, it's probably for the best for them to make A+ and A sound really good. I don't know about those two ratings, but as far as I understand it, Santander is rated no lower than most of the rest of the UK banks - they've just been downrated to their level instead of being above them. (I haven't seen it confirmed yet, but apparently HSBC is the only bank in the UK with a higher credit rating - I don't see everyone panicking about the other banks!).

This of course isn't mentioned in most of the general media reports on the matter - and we wonder why we get all this nonsense worrying over the stability of banks!

innovate

callum9999 wrote: »

....Santander is rated no lower than most of the rest of the UK banks - they've just been downrated to their level instead of being above them. (I haven't seen it confirmed yet, but apparently HSBC is the only bank in the UK with a higher credit rating - I don't see everyone panicking about the other banks!)

Quite right - nobody made any noise about the fact that HSBC, and Santander UK until last week, were the UK banks with the best Moody's ratings.

The entire Press seems to be shielding us from facts, and just make up some sensationalist stories when they need to sell more papers. Haven't seen any who published the ratings so we could compare.

Unless you pay a lot of money, it's difficult for Joe Bloggs to get hold of the actual ratings. Thanks to Moneysupermarket, we do have a list from last October, however. With the exception of Santander UK, who are now A2, I believe those ratings are still current.