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Scotia has traditionally commanded a very high rating from Moody’s because it was viewed as a very conservative bank, even among Canadian banks, a group that is generally perceived as more risk averse than many global counterparts.

Even with the downgrade, the bank continues to be one of the highest rated in the world, said Diane Flanagan, vice-president of corporate communications at Scotia.

“The Bank has a strong risk culture and prudent business model diversified by geography, products and customers,” she said in an emailed statement.

There is little on the horizon that would cause an upgrade to Moody’s rating on the bank, according to Beattie’s assessment.

“Moody’s believes it is likely… [the] increased risk tolerance and strategic imperative to increase profitability by shifting the asset mix towards higher yielding categories of consumer credit, both domestically and in international operations, will persist,” he wrote.

The Bank has a strong risk culture and prudent business model diversified by geography, products and customers

The ratings agency’s outlook for Scotia’s ratings is negative, along with the rest of Canada’s large banks. This longstanding stance reflects Moody’s view that the government support for banks has shifted “to the downside.”

In response to the financial crisis of 2008, governments around the world, including Canada, moved towards bail-in regimes that would shift the burden of a failing bank to that institution’s securities holders and reduce taxpayer exposure.

In contrast to the Moody’s assessment, rival ratings agency Fitch this week held firm on the default ratings assigned to Canada’s big banks.

The outlook was also maintained as stable, with one exception. Fitch changed its outlook on Royal Bank of Canada’s to negative from stable.

The ratings agency said the change was made because Royal Bank’s “future earnings volatility may be higher than Canadian bank peer averages as well as in comparison to similarly rated global financial institutions.”