Lloyds and RBS shares fall on Fitch downgrade

Banks shares extended losses this afternoon as Fitch Ratings downgraded Lloyds and RBS' long-term credit rating from AA- to A and placed Barclays on a negative watch.

Fitch said the dynamics of state support for the banks have changed, and there is now more political will to withdraw support for these major UK financial institutions, building on the recommendations of the Independent Commission on Banking. It added the move to place Barclays on a negative watch reflects its view that global trading and universal banks have business models that are particularly sensitive to market sentiment and confidence. Shares in the banks, which were already lower prior to the announcement, fell further in reaction to the downgrades. At 1.30pm Lloyds had fall...