Moody's downgrades BoC, Marfin and Hellenic banks.
Moody's cut Bank of Cyprus' ratings by one notch to Ba2 from Ba1, Hellenic Bank by one notch to Ba2 from Ba1, and Marfin Popular Bank by three notches to B2 from Ba2.
Moody's has also placed the ratings of the three banks on review for further downgrade. These actions follow Moody's downgrade on November 4 of the Cypriot government bond rating by two notches to Baa3 (on review for possible further downgrade) from Baa1.
Moody's said the primary driver underlying the rating downgrades of these three banks is the reduced ability of the country to support its large banking system, which has an asset base equivalent to six times the country's GDP. Moody's reassessment of the sovereign capacity to support the banking system reflects a weakening in the strength of the country's balance sheet, as indicated by the two-notch downgrade of Cyprus's government bond ratings to Baa3 from Baa1 on November 4.
Copyright Cyprus Mail 2011
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