Business

S&P cuts French banks' credit rating

BNP Paribas
Image caption BNP Paribas is one of the three lenders affected

Three French banks including BNP Paribas have had their credit rating downgraded by ratings agency Standard and Poor's (S&P).

Explaining its decision, S&P said that French banks faced increased economic risks, which left them "moderately more exposed to the potential of a more protracted recession in the eurozone".

The other two lenders to be downgraded are Cofidis, and Banque Solfea.

S&P also warned that 10 other banks might be downgraded in the future.

These 10, which have been placed on a negative outlook, include Credit Agricole and Societe Generale.

S&P has lowered its long-term rating on BNP Paribas from AA- to A+.

Banque Solfea has been cut from A to A-, and Cofidis from A- to BBB+.

S&P said French banks faced problems including "a relatively high public debt burden, reduced external competitiveness, and persistent high unemployment, which are being aggravated by the ongoing eurozone crisis, a more protracted recession across Europe, and lower domestic growth prospects".

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