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Moody’s downgrades five Portuguese banks

Credit rating agency Moody’s said it had downgraded five Portuguese banks and was putting seven others on negative watch, in a statement overnight.

Moody’s downgraded by one notch Caixa Geral de Depositos, Banco Espirito Santo, BPI, and Banif, aligning them with the rating for the Portuguese government which was downgraded from Ba2 to Ba3 on February 13.

It downgraded by two notches to Ba1 the rating of Banco Santander Totta, a subsidiary of the Spanish Santander group.

The agency maintained its notation for BCP and Montepio banks, but with negative outlook as for the downgraded banks.

The agency explained in its statement late on Wednesday that the quality of assets in Portugal held by these banks was likely to weaken, mainly because of the mediocre outlook for the Portuguese economy.

Moody’s also expressed concern about the ability of the banks to access private finance.