Moody’s have downgraded nine Portugese banks, largely due to their exposure to the ailing country’s debt and poor growth prospects for the austerity-stricken economy.
The difficulty of accessing credit was another factor in the downgrades.
Six banks - Caixa Geral de Depositos, Banco Comercial Portugues, Banco Espirito Santo, Banco BPI, Banco Santander Totta and Caixa Economica Montepio Geral - suffered downgrades to both their standalone ratings and their debt ratings.
Three banks - Banco Internacional do Funchal, Banco Portugues de Negocios, and Espirito Santo Financial Group – suffered cuts only to their debt ratings.
The exposure of Banco Comercial Portugues and Banco BPI to Greek debt was a factor in their two-notch downgrades.
Banco Espirito Santo’s two-notch downgrade reflected concerns about loss of market access affecting the bank particularly harshly.
All other banks were downgraded by one notch.