Fears over the deteriorating UK economic outlook have seen the Clydesdale bank slapped with a credit rating downgrade.
Ratings agency Standard & Poor’s (S&P) said the bank would face rising losses on its loans, particularly in its commercial portfolio.
S&P said the lender, which is owned by National Australia Bank, could post negative earnings this year because of the losses, which are on the rise as the recession tightens its grip on the UK economy.The ratings agency said it anticipates Clydesdale’s mortgage book will continue to perform better than other lenders in the market.
But the performance of its commercial loans – which include exposures to the recession-hit property and construction sectors – was expected to suffer in line with other lenders.
