Moody's downgrades BoC, Marfin and Hellenic banks

Moody’s Investors Service has today downgraded the long-term deposit and debt ratings of the island’s three main banks over the reduced ability of the government to support the large banking system if necessary.

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.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.