S&P says that the worst of crisis for banking securities activities passed

According to a top rating agency Standard & Poor`s, global banks are past the worst of their crisis over their securities activities.

The agency said that the assessment should support the credit ratings of affected banks, though improvement in their securities-related businesses would be gradual.

Besides, it noted that losses from bad loans were now increasing in a separate area of banking activity.

The economic recession had hit banks' securities business first and on several fronts. Among the problem areas were asset-backed securities, collateralized debt obligations, residential mortgaged-backed securities, and monoline-related and leveraged finance positions.

Additionally, the results of global banks had been cut back by a "drastic" slowing of activity from the middle of 2007 and which had accelerated until late in 2008.

"However, we now think that fourth-quarter 2008 likely marked the trough for these banks' trading operations and that first-quarter 2009 has seen the bottom of their investment banking, asset management, and wealth management businesses," S&P credit analyst Scott Sprinzen said.