Fitch Downgrades CBA, NAB and WBC Friday Night

The downgrade of the Long-Term IDRs and VRs of CBA, NAB and WBC reflect the weaker funding profile of the major Australian banks relative to similarly rated international peers. Despite some improvement since 2008, all four banks retain a reliance on wholesale funding, particularly from offshore markets.

Fitch estimates and comments included:

wholesale funding made up about 40% of total funding (excluding derivatives),

the offshore component of wholesale funding about 60% of the total.

this exposure is managed well by the banks

the funding profile leaves the banks susceptible to dislocation in international wholesale funding markets.

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