J.P. Morgan's broker-dealer subsidiary has been upgraded one notch by Standard & Poor's (S&P), raising it to AA-/A-1+ with a stable outlook.
The credit rating agency said it expects capital to continue to build and payout ratios - both dividend and share buy-back - to remain modest. The rating is also based on the unconditional guarantee of J.P. Morgan Securities.
"We could also lower the ratings if rule making regarding Dodd-Frank legislation hurts profitability more than we expect," wrote S&P.
The upgrade comes in the same week as S&P downgraded the US central securities depository and three clearinghouses following the US sovereign downgrade. However, S&P affirmed the fundamental soundness of those operations, citing sovereign credit risk as the key consideration.
