National Australia Bank Limited’s (ASX:NAB) UK banking arm has been dealt another blow, with ratings agency Fitch Ratings downgrading the bank’s Clydesdale and Yorkshire Bank to A+ from AA-, with a stable outlook.
Yorkshire Bank is NAB’s smaller UK banking unit that shares Clydesdale Bank's balance sheet.
Fitch's cut comes hot on the heels of a downgrade from fellow ratings agency, Moody's Investors Service, who last week cut the credit rating of the banks and questioned NAB’s commitment to its UK arm.
Fitch says the downgrade reflects its belief that the strategic importance of Clydesdale Bank to its parent bank, National Australia Bank, may be diminishing slightly.
Fitch continues to say that, this reflects the more stringent regulation and a less favourable economic environment in the UK which may indicate that the UK banking sector has become less attractive to foreign banks.
In the first half of the 2011 financial year National Australia Bank posted a net profit of $2.4 billion.
