Moodys downgrades three Cyprus banks
International ratings agency Moody’s has downgraded Cyprus’s three most Greece-exposed commercial banks because of the country’s diminished ability to back them up.
Moody’s downgraded Marfin Popular Bank by three notches to Ba2 and cut Bank of Cyprus and Hellenic Bank by one notch to Ba1.
The agency warned today that the three banks could be downgraded again.
The move follows Moody’s reduction of Cyprus’s sovereign credit rating by two notches to Baa3.
Another cut and Cyprus’s rating will be considered junk, raising fears that the small island may need to get a financial bailout from its partners in the eurozone.
The agency said Marfin’s higher exposure to Greek government bonds compared with the other two banks makes it more likely that it would require a government cash injection.
