S&P cuts bank ratings following France downgrade

Standard & Poor’s has cut the counterparty credit ratings on three French banks, following its removal of France’s AAA rating earlier this month.

S&P downgraded the ratings of Société Générale and Crédit Agricole, the country's second and third largest banks, from A+ to A, and also cut Caisse des Depots et Consignations from AAA to AA+.

BNP Paribas, however, was left untouched at AA-.

The downgrades come after S&P stripped France of its AAA rating on 13 January alongside a host of other eurozone downgrades, citing fears that European policy initiatives may be "insufficient" to fully address ongoing systemic stresses in the single currency area.

"The downgrade of some of these banks follows the downgrade of France to 'AA+' and factors in the relationship under our criteria of our ratings on 'systemically important' banks to sovereign ratings as well as our assessment of their stand-alone credit profile," S&P said in a statement.

Soc Gen shares, which have ralled almost 30% since the start of the year after slumping in 2011, were down 3% in early trading this morning at €22.10.