Backer of Post Office savings faces credit rating downgrade

[TrueBlueTerrier]

http://www.telegraph.co.uk/finance/pers ... grade.html" onclick="window.open(this.href);return false;

The risk rating of Bank of Ireland, which backs Post Office savings accounts, faces downgrade after one of the world's leading ratings agencies said it would review its credit rating.

Moody's said it had placed the long-term bank deposit ratings of Bank of Ireland "on review for possible downgrade". The same applied to Allied Irish Banks, it added.

Anglo Irish Bank, another Irish bank with British savers among its customers, has seen its credit rating actually cut by Moody's. The agency downgraded Anglo Irish from A2 to A3 "with a negative outlook". Other smaller Irish lenders were also put on review.

Ross Abercromby of Moody's said: "The review of the debt and deposit ratings of Allied Irish Banks and Bank of Ireland ... will look at the extent to which Ireland's ability to provide support to its banking system may be impacted by the weakening of the government's own debt capacity (which is under review for possible downgrade) as a result of the ongoing global economic and credit crisis."

Moody's said the review was not expected to lead to more than a one, or possibly two, notch change in the debt and deposit ratings of the institutions under review. The rating agency expected to conclude this review on the bank ratings following the conclusion of the review of the Irish government bond rating.

The Post Office products run by Bank of Ireland are Instant Saver, Growth Bond, Fiveyear Saver, Guaranteed Equity Bond and Cash Isa, according to its website.
David Black, a banking analyst at Defaqto, the data provider, said: "The Moody’s downgrading does give cause for concern."

British savers worried about their money in the wake of the run on Northern Rock rushed to put money in Irish banks after the Irish government introduced a blanket guarantee for all deposits until September 28 2010.

At the time the official British safety net, the Financial Services Compensation Scheme (FSCS), covered just the first £35,000 of an individual's savings. The limit has since been increased to £50,000 and the British Government has signalled that it will not in practice allow savers to lose money.


More recently it has emerged that, because the Irish protection limit is higher than the FSCS's, the British scheme would not be involved in reimbursing savers in the event of an Irish banking failure; the whole responsibility would fall instead on the Irish scheme.

A spokesman for the Post Office said: "We are completely confident in our successful joint venture with the Bank of Ireland and we are planning to expand our range of financial services in the coming months."

[Lounge Lizard]

Did I hear somewhere that the Post Office might be starting its own proper banking service, not just selling Bank of Ireland services ?
I ask because what was National Girobank has given me crap service since being sold by the tories to Alliance and Leicester and I've even less confidence now it's been taken over by and renamed Santander.

[POSTMAN]

Yes
http://www.cwu.org/news/archive/post-ba ... p-ten.html" onclick="window.open(this.href);return false;

[Lounge Lizard]

Yes
http://www.cwu.org/news/archive/post-ba ... p-ten.html" onclick="window.open(this.href);return false;

Thanks.