Moody's downgrades RBC and 14 other banks

Stockhouse Editorial
0 Comments| June 21, 2012

The Royal Bank of Canada (TSX:T.RY, Stock Forum) was the only Canadian bank among 15 to be downgraded by Moody’s on Thursday.

In the U.S., giants such as the Bank of America (NYSE:BAC, Stock Forum), Citigroup (NYSE:C, Stock Forum), Goldman Sachs (NYSE:GS, Stock Forum) and JP Morgan (NYSE:JPM, Stock Forum) were all downgraded.

According to previously published reports, Moody’s originally put the banks under review in February because they feared that their rapidly changing risk positions could put even the biggest banks in trouble.

After the markets closed on Thursday, the banks were officially downgraded.

Some of the banks were also put on negative outlook, which is a warning that they could be downgraded again later.

Luckily for RBC, they were not one of the banks to receive the negative outlook. In fact, RBC was classified in the top-tier of those affected.

However, this didn’t stop Moody’s from dropping RBC’s debt rating from Aa1 to Aa3.

On Thursday, RBC closed at $51.33 a share, leaving Canada’s largest bank with a market cap of $74.1 billion, based on $1.4 billion shares outstanding. The 52-week high and low was $59.13 and $43.30 respectively.

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