Rabobank Loses AAA Rating

There has been a lot made about Rabobank and their AAA rating here through the years. Also, Rabobank have used their AAA rating in advertising for their RaboDirect products. Now the AAA rating, from S&P is gone, Rabobank have been downgraded ....

Reuters: Rabobank: The last triple-A rated bank falls

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Dutch cooperative bank Rabobank RABN.UL lost its cherished triple-A rating from Standard & Poor's as the global banking crisis finally caught up with the only bank still holding the top rating.

The unlisted bank had long prided itself on its triple-A rating. It said in the 2007/08 financial crisis it was not tempted to snap up a bargain if it put the rating at risk, and maintains a conservative capital and liquidity stance.

But S&P cut its long-term rating on the bank to AA from AAA as part of a sweeping overhaul of its ratings. Credit ratings influence how much a bank pays to borrow funds, and offers a guide to financial health.

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Mmm rewind in the past where those of us who pointed out to Rabo their rather low deposit rates and usually got the AAA sign shoved into our faces repeatedly (sorry couldn't resist).

I doubt that this means Rabo will start adjusting their rates to be slightly more competitive. At least they'll have to come up with something new outside of AAA to convey that their the 'safest' bank in Ireland. Though 'safest' is quite subjective in these times made more complicated by a variety of other factors like the implications of possible solutions to both Ireland's debt crisis and the wider Euro problems.

In fairness they're targeting a certain market segment people who want a relatively 'safe', simple, straightforward deposit account which I can nod my head at as there's obvious demand for such in Ireland. It's just in my personal opinion that the Rabo rate for e.g. their demand deposit account isn't even near decent when you consider that their overheads are very minimal as an internet only bank.

I tried Google and all I was able to find was that ..

There is no explanation why they got down-rated. So is it just again a Rating agency trying to help others to make their profit?

Surely without any explanation or description those rating downgrades are use and meaningless and do not reflect anything of material.

and I quote:
"S&P adjusted ratings on 37 of the world's largest financial institutions as part of a process of "applying its new ratings criteria for banks."

While even Rabobank says:
"We knew this was coming," Bert Bruggink was quoted by Dutch broadcaster NOS as saying. "We also knew they were working on a new methodology for more than a year. We expected it was inevitable banks would lose the triple A status. We are still a creditworthy bank. Double A is the new triple A."

This does neither comply to a transparency commitment nor to trust into the rating agency's. The war on the Euro weakening is just ongoing to hit the target to ruin whole Europe.

We must stop to trust rating agency's who in the short past got everything wrong but were the ones who made the biggest profit out of the misery we have in Europe.

my 2 cents when I read this.

Once again, we see the predictions and recommendations made by "investment gurus" are based nothing more than speculation. Earlier in the year we saw many commentators recommending that we move our savings to safe havens like the Swiss Franc, Canadian Dollar, German Government Bonds or Rabobank.

The sad fact is that what might appear to be a "safe haven" can in the light of subsequent events be revealed to be less safe than we might have hoped.

I have covered this in more detail here on my blog

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Nothing to see here, they basically said no bank should be triple A, thats basically all.

Rabobank's spin on their double notch downgrade can be read [broken link removed]. At the end of the day, Rabobank, like any other European bank, have huge exposure to the Euro and will have serious issues to contend with if the Euro breaks up. S&P realise this.

It always baffled me how on one hand Rabobank can be regarded as the 'safest bank' and then on the other hand could have made such heavy losses & made such poor decisions with AccBank.