Fitch Ratings on May 15 revised to positive from stable the outlooks on the long-term issuer default ratings of Royal Bank of Scotland Group PLC and units Royal Bank of Scotland plc, National Westminster Bank PLC, NatWest Markets PLC, Ulster Bank Ltd., Royal Bank of Scotland International Ltd., NatWest Markets Securities Inc. and NatWest Markets NV.
The ratings was affirmed at BBB+ for Royal Bank of Scotland Group, NatWest Markets Plc, Royal Bank of Scotland International, NatWest Markets Securities and NatWest Markets NV and at A- for Royal Bank of Scotland, National Westminster Bank and Ulster Bank. The short-term issuer default ratings of the companies were affirmed at F2.
The agency affirmed the "bbb+" viability rating, the 5 support rating, the support rating floor of No Floor of Royal Bank of Scotland Group, Royal Bank of Scotland and National Westminster Bank. The BBB+/F2 long- and short-term senior unsecured debts of Royal Bank of Scotland Group and NatWest Markets Plc were also affirmed.
At the same time, the agency affirmed NatWest Markets Plc's "bbb+" viability rating and its support rating floor at No Floor, while maintaining its support rating of 5 on Rating Watch Positive. Ulster Bank's support rating was affirmed at 1 and those of Royal Bank of Scotland International, NatWest Markets Securities and NatWest Markets NV at 2. The derivative counterparty ratings of NatWest Markets Plc and NatWest Markets Securities were affirmed at BBB+(dcr).
The agency also affirmed NatWest Markets NV's senior unsecured debt at BBB+.
The outlook revision reflects the removal of uncertainty around the time and the amount of a penalty on the British lender following the May 10 announcement of a $4.9 billion settlement with the U.S. Department of Justice. The penalty, which related to alleged misselling of U.S. residential mortgage-backed securities between 2005 and 2007, had affected the group's ratings. The group's long-term issuer default and viability rating could be upgraded if it continues to keep sound operating profitability and capitalization during the restructuring plan, Fitch said.
