Moody's cuts German banks ratings on euro crisis

Moody’s Investors Service have cut the credit ratings of several German banks citing increased risk of further shocks emanating from the eurozone debt crisis and their limited loss-absorption capacity.

“As a result, the long-term debt and deposit ratings for six groups and one German subsidiary of a foreign group have declined by one notch, while the ratings for one group were confirmed,” it said.

The banks included the New York and Paris branches of Commerzbank, Dresdner Bank AG, its New York branch also had their ratings cut.

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Moody’s also said that further to these actions, it had assigned stable outlooks to the ratings of most German banks.

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Moody’s said the ongoing rating review for Deutsche Bank AG and its subsidiaries will be concluded together with the reviews for other global firms with large capital markets operations.

It noted that several factors have caused the ratings of many German banks to decline by less than for other European banks, including below-average unemployment, low household and corporate debt levels and the general resilience of the German economy.

Reuters