Standard & Poor's (S&P) has made a series of ratings cuts and lowered the outlook on several French banks because it sees higher risk exposure to the Eurozone economy as well as downward pressure on the banking sector.

"The economic risks under which French banks operate have increased in our view, leaving them moderately more exposed to the potential of a more protracted recession in the Eurozone," S&P said.

These experts further warn that problems in France's housing market will make the "economic environment for banking (...) more demanding". They also believe that near term risks will rise due to increased competition and that "funding conditions could remain volatile".

As a result, S&P has lowered their lowered its long- and short-term counterparty credit ratings on Banque Solfea to 'A-/A-2' from 'A/A-1' and lowered long- and short-term counterparty credit ratings on BNP Paribas to 'A+/A-1' from 'AA-/A-1+'. It also lowered the long-term counterparty credit rating on Cofidis to 'BBB+' from 'A-' and affirmed its 'A-2' short-term rating. The outlook on the ratings on these banks is negative.

Furthermore, they also affirmed ratings but revised the outlook to negative from stable on the following banks: Allianz Banque, BPCE, Credit Agricole S.A., Credit Foncier et Communal d'Alsace et de Lorraine-Banque (CFCAL-Banque), Credit Mutuel (rated entity Caisse Centrale du Credit Mutuel), Exane S.A., La Banque Postale, RCI Banque, Societe Generale, and Socram Banque.

Lastly, they affirmed the ratings on Banque Accord, Credit Foncier de France (CFF), and Credit Logement. The outlook remains unchanged at stable for Banque Accord and CFF and negative for Credit Logement.

JM

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