Six Banks May Receive Triple-A Credit Rating

Contributed by mm | November 1, 2006 3:32 PM PST

AAA credit rating is probably only of cosmetic value to the big banks, but I'm glad to see S&P reaffirms the financial soundness of my portfolio holdings in Bank of America Corp. (BAC), Citigroup Inc. (C) and J.P. Morgan Chase and Co. (JPM).

From WSJ:

The ratings agency placed Bank of America Corp. (BAC), Citigroup Inc. (C), J.P. Morgan Chase and Co. (JPM), U.S. Bancorp (USB) and Wells Fargo & Co. (WFC) on CreditWatch with positive implications, indicating that the banks' ratings could potentially be upgraded to as high as triple-A.

Such consideration is based on the view "that the U.S. banking industry has become sounder on a variety of fronts over the years, so that the potential for higher ratings - including the 'AAA' level - now exists," the rating agency said in a statement. The triple-A rating is the highest on the credit-ratings ladder.

S&P cited higher and more consistent profitability, diversification by product, customer and geography and better risk management as positives in the sector.

...

Bank of America, U.S. Bancorp and Citigroup currently have a double-A-minus rating from S&P, while J.P. Morgan and Wachovia have an A-plus and Wells Fargo has a double-A.

No U.S bank currently has a triple-A rating, said Tanya Azarchs, a credit analyst with S&P.

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