Fitch Ratings downgraded HBOS Plc. and main operating unit Bank of Scotland Plc., citing heightened concerns over the outlook for core parts of HBOS's retail and corporate banking divisions as the U.K. economy and property markets weaken, combined with weaker operational flexibility due to continuing disruption/dysfunction in parts of wholesale funding markets on which HBOS relies quite heavily to finance its customer lending.
The U.K.'s largest residential mortgage lender's long-term issuer default ratings were cut to 'AA' from 'AA+'. The outlooks remain negative.
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