Moody's: Negative view for Lithuania banks

The fundamental credit outlook for the Lithuanian financial institutions is negative, reflecting the prospects of a decline in economic growth and its effect on asset quality and profitability, Moody's Investors Service said in a new report.

After several years of above-trend growth, the economy appears poised to slow significantly in 2009, Moody's said, which is expected to have an adverse impact on banks' profitability and asset quality.

The agency said it expects an increase in problem loans in the real estate and consumer-lending segments, which are likely to be hardest hit by the economic slowdown.

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