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Fitch affirms ratings of Australia's 4 major banks

Fitch Ratings said May 11 that it affirmed the ratings ofAustralia & New ZealandBanking Group Ltd., Commonwealth Bank of Australia, andWestpac Banking Corp.

The rating agency affirmed all four banks' long- andshort-term issuer default ratings at AA- and FF+, respectively. The viability ratingsof the banks were each affirmed at "aa-," while their support ratingand support rating floors were affirmed at 1 and A, respectively.

The outlook on the banks' long-term issuer default ratingsis stable.

The banks' issuer default ratings reflect their dominantfranchises in Australia and New Zealand, strong and sustainable profitability,as well as improving liquidity and capitalization positions. The rating agencynoted that the Australian prudential regulator's conservative and hands-onapproach mitigates risks stemming from rising household indebtedness, lowinterest rates and high property prices.

Fitch said the rating upside for the four banks is limiteddue to their high ratings, increasing macroeconomic risks and weaker fundingprofile, compared to its similarly rated international peers.

Conversely, a significant slowdown in Chinese economicgrowth, continued rising house prices and a material deterioration in fundingand liquidity profiles are among the downside risks to the banks' ratings.