A robust wealth management offering was a key factor in the recent credit quality upgrades of the six largest US banks by ratings agency Sta...

A robust wealth management offering was a key factor in the recent credit quality upgrades of the six largest US banks by ratings agency Standard & Poor’s, said Tanya Azarchs, S&P financial services industry analyst.

S&P announced it had raised the credit ratings on US Bancorp, Bank of America, Citigroup, JP Morgan Chase, Wachovia and Wells Fargo.

Wells Fargo was the highest climber, having been upgraded one notch to AA+.

US Bancorp, Bank of America and Citigroup were raised one notch to AA, while JP Morgan Chase and Wachovia were also upgraded one notch to AA-.

Ms Azarchs said all the top six banks showed they had honed their respective franchises to provide clients with a complete offering.

“We do think wealth management is one of the less volatile areas in financial services and a keystone of relationships that shows customers are more likely to stick around,” Ms Azarchs told WealthBriefing.

As well, she said, private banking is a key diversifier, especially in brokerage businesses.

She pointed to recent credit ratings upgrades by S&P of Swiss banks, UBS and Credit Suisse, as examples of businesses that have benefited from the diversification of strong private banking businesses.

Ms Azarchs said the upgrade of Wells Fargo’s to AA+ was based on leading market share within certain banking businesses, making it the first US bank to be ranked the highest possible rating by S&P since 1998 when Morgan Guaranty Trust Co lost the status.