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RBS clashes over Moody’s rating

Royal Bank of Scotland Group has lashed out following its ratings downgrade by Moody’s, arguing that the “backward-looking” action does not take into account improvements to its balance sheet.

In a market statement, the group explains: “The group disagrees with Moody’s ratings change which the group feels is backward-looking and does not give adequate credit for the substantial improvements the group has made to its balance sheet, funding and risk profile.

“Nonetheless, the group believes the impacts of this downgrade are manageable, bearing in mind its £153bn liquidity portfolio.

“The amount of collateral that may have to be posted following this one notch downgrade by Moody’s is estimated to be £9bn as of May 31, 2012. The group continues to maintain a solid liquidity and funding position. RBS has completed its planned wholesale funding requirements for 2012.”

The bank was among a number of its peers to be downgraded by the ratings agency.

In its rebuttal, the bank claimed it had taken a number of steps to strengthen, including winding down its non-core assets portfolio, maintaining a strong Core Tier 1 capital ratio, and reducing its eurozone exposure.

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