None of the other big four banks commented on their funding requirements, although National Australia Bank said further improvement in its capital ratios "is a near-term objective".
Investment bank Macquarie Group, which was cut two notches to BBB from A-, said about 90 per cent of the group's funding is undertaken by its banking business, Macquarie Bank, whose rating was kept steady at A.
S&P last night revised ratings on major financial institutions in the Asia-Pacific region according to its new ratings criteria for banks, leading to a one-notch downgrade to AA- from AA for CBA, Westpac, Australia & New Zealand Banking Group and NAB. Investment bank Macquarie Group Ltd. (MQG.AU) was cut two notches to BBB from A-. Chief Financial Officer Greg Ward said that about 90 per cent of the group's funding is undertaken by its banking business, Macquarie Bank, whose rating was kept steady at A.
"We're very pleased about that," Macquarie chief financial officer Greg Ward told Dow Jones Newswires, in reference to Macquarie Bank’s rating remaining steady. Macquarie Group "does less than 10 per cent of the funding so it's not a big deal for us", Mr Ward said, adding the company doesn't expect its funding costs to be affected and it has only about $10 billion of debt maturing over the next three years, compared with liquid assets of about $25bn.
Macquarie shares slid 1.4 per cent in early trade, underperforming a 0.4 per cent rise in the wider market. NAB was down 0.2 per cent, while the other three big banks rose between 0.3 per cent and 0.8 per cent.
Australian banks sidestepped the worst of the global financial crisis by largely avoiding toxic US real estate debt. They are also more conservatively regulated and buoyed by an Australian mining sector feeding fast-developing Asian economies, including China.
However, they rely heavily on offshore wholesale debt to fund large chunks of their loan books and are vulnerable to blowouts in credit spreads that have been pushed wider again by the European sovereign debt crisis.
All four banks, as well as a few smaller Australian lenders, are being supported in part by fresh policy changes, including access to a new central bank credit facility and the ability to offer covered bonds, which are backed by cashflow from mortgages.
"At this point we do not expect this to have any material impact on our funding plans or expected pricing of our new issuance," Commonwealth Bank treasurer Lyn Cobley said today in a statement. All four banks noted they remain among the small number of lenders in the world within S&P's AA categories.