Australia’s major banks are set to retain their double-A long-term credit ratings despite a sharp rise in credit exposures for the two biggest banks during 2008/09.

Global ratings agency Standard & Poor’s (S&P) said the long-term credit ratings of Australia’s major banks will not change in light of the agency’s new framework for assessing capital adequacy.

S&P’s survey of 45 large international banks included Australia’s big four banks and found the average risk-adjusted capital (RAC) score to be more than three per cent lower than the average tier 1 capital ratio.

Capital adequacy levels reflect whether banks have enough funds to cover their credit exposures.
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