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A Royal Bank of Canada (RBC) sign is seen in downtown Toronto in this March 3, 2011 file photo.

MARK BLINCH/REUTERS

For Royal Bank of Canada, there's a bright side to getting caught up in the mass downgrade by Moody's of the biggest global banks.

Moody's cut its ratings on 15 banks, and that swept a lot of them out of the 'Aa' category – but not RBC, as analyst Peter Routledge of National Bank Financial notes Friday. Royal remains one of three global banks in that category, along with HSBC and JPMorgan Chase & Co., instead of being one of 10.

That could lead to a benefit on the funding side as other banks in the interbank lending business will look at RBC in a better light relative to those other banks that were dropped below 'Aa.' R

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"To the extent they use ratings in weighing counterparty risk, the chief risk officers of RY's counterparties will, we believe, beneficially distinguish the bank from its peers even more than before today's rating action," said Mr. Routledge (who knows from Moody's bond ratings, as he worked at Moody's covering Canadian bank bonds before moving to National Bank in 2010 to cover the banks from the equity side.)

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