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Moody's cuts German, Austrian banks on euro risks


economy

Moody's cuts German, Austrian banks on euro risks

Moody’s has cut the ratings of six German banking groups and Austria’s three largest banks.

While noting the relative strength of the German and Austrian economies, the credit rating agency said this was because those banks face risks if the eurozone crisis deepens.

The downgrades were part of a broad review of the region’s banks but were mild compared to cuts for those in Spain and Italy.

Commerzbank, Germany’s second-largest lender, saw its long-term rating cut by one notch to A3 from A2 and assigned a negative outlook.

Other German banks Landesbank Baden-Wuerttemberg and Norddeutsche Landesbank GZ were lowered to A3 from A2 and given stable outlooks while Italy’s UniCredit saw its German unit cut to A3 from A2 and given a negative outlook.

The agency delayed action on Deutsche Bank and its subsidiaries, saying that will come with reviews for other global firms with large capital markets operations.

In Austria, Moody’s cut the long-term rating for Erste Group Bank by two notches to A3 from A1 and assigned a negative outlook. UniCredit Bank Austria was cut to A3 from A2, also with a negative outlook. Raiffeisen Bank International was cut to A2 from A1 and assigned a stable outlook.

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