Moody's cuts Oesterreichische Volksbanken

Moody's Investors Service said it downgraded the senior unsecured debt and deposit ratings of Oesterreichische Volksbanken AG to Ba1 from Baa3 and placed the ratings on review for further downgrade.

The agency also downgraded the short-term rating to Not Prime from Prime-3 and affirmed the standalone bank financial strength rating at E, equivalent to a caa1 baseline credit assessment. During the review period Moody's will also assess the potential for downward adjustment for the bank's baseline credit assessment.

Moody's said the downgrade reflects its assessment of weakened willingness of the Austrian government for further capital support for Oesterreichische Volksbanken as evidenced by statements of government officials.

The potential for downward adjustments of the bank's baseline credit assessment and, as a consequence, of the long-term debt and deposit ratings results from a potential need for additional capital measures driven by Oesterreichische Volksbanken's weak credit profile and follows a projected loss in excess of €200 million at the single entity level for the company for the fiscal year 2013, as announced on Dec. 19. The performance of Oesterreichische Volksbanken run-down portfolios and its Romanian operations create further uncertainties around the bank's future capital needs, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.