23 have been downgraded today

  • No news on the 'big 4', but many smaller banks, credit unions, etc. downgraded today.
  • This is related to concerns over high levels of private sector debt and high house prices

Likely to be a weight on the AUD

More (S&P's summary):

  • In our opinion, economic imbalances in Australia have increased due to strong growth in private sector debt and residential property prices in the past four years, notwithstanding some signs of moderation in growth in recent weeks. Consequently, we believe financial institutions perating in Australia now face an increased risk of a sharp correction in property prices and, if that were to occur, a significant rise in credit losses.
  • Despite increased downside risks, in our base case we expect that recent and possible further actions by the Australian authorities should aid in an unwinding of the imbalances in an orderly fashion.
  • To reflect the increased risk, we have lowered our assessment of the stand-alone credit profiles (SACPs) of almost all financial institutions operating in Australia.
  • We are lowering our long-term issuer credit ratings on 23 financial institutions in Australia by one notch each.
  • We are affirming our issuer credit ratings on the four major Australian banks reflecting our expectation of likely timely financial support from the Australian government, if needed - which in our view offsets the deterioration in these banks' SACPs. Nevertheless, these banks remain on negative outlooks, reflecting potential pressures on government support.
  • We are also affirming our ratings on Macquarie Bank and Macquarie Group. The outlook on Macquarie Bank remains negative and we have revised the outlook on Macquarie Group to stable.
  • Our ratings on five foreign-owned financial institutions, three entities owned by larger domestic financial groups, and one Australian government-owned financial institution remain unchanged because our ratings on these institutions primarily reflect our unchanged assessment f the likelihood of financial support from their parents, if needed.

more to come