Moody's on March 23 took several actions on the ratings of Crédit Mutuel Group units Banque Fédérative du Crédit Mutuel SA, Crédit Industriel et Commercial SA and Crédit Mutuel Arkéa SACC.
The agency upgraded BFCM's baseline credit assessment to "a3" from "baa1" but downgraded its adjusted baseline credit assessment to "a3" from "a2." CIC's adjusted baseline credit assessment was also downgraded to "a3" from "a2", while its baseline credit assessment was affirmed at "baa1."
Moody's also affirmed both lenders' Aa2(cr)/Prime-1(cr) long- and short-term counterparty risk assessments and Aa3/P-1 long- and short-term bank deposit ratings, with stable outlooks on the long-term deposit ratings.
The downgrades of the adjusted baseline credit assessments reflect Moody's opinion that although Crédit Mutuel Group is fundamentally strong, it is exposed like other French banks to negative profitability trends within French retail banking. The agency downgraded its assessment of the group's stand-alone creditworthiness to "a3" from "a2".
Moody's downgraded Crédit Mutuel Arkéa's adjusted baseline credit assessment to "a3" from "a2," also reflecting the change with respect to Crédit Mutuel Group, and placed the rating on review for further downgrade. The agency extended the review for downgrade of the bank's Aa3 long-term bank deposit and issuer ratings, P-1 short-term issuer rating and Aa2(cr) long-term counterparty risk assessment, reflecting the increased risk of a separation of the bank from its parent company.
The bank's "baa1" baseline credit assessment, P-1(cr) short-term counterparty risk assessment and P-1 short-term bank deposit ratings were affirmed.