Fitch downgrades seven UK building societies
Fitch has downgraded the credit ratings of seven UK building societies.
Britannia, Chelsea, Newcastle, Principality, Skipton, West Bromwich and Yorkshire have all been downgraded, reflecting the credit rating agency’s assessment of their exposures to specialist mortgages, such as sub-prime and buy-to-let, and high loan to value (LTV) ratios.
The move also takes account of the mutuals’ involvement in the commercial mortgage sector and their recent growth patterns in lending.
The decision acknowledges the worsening outlook for the UK economy, which Fitch expects to result in larger impairment charges for all UK building societies, as unemployment rises and house prices decline.
With regard to Britannia, which is the UK’s second-largest building society and was last month reported to be interested in a merger with Co-operative Financial Services, Fitch has doubts about its Platform lending arm, which once specialised in high LTVs. more
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