Moody's may lower three Romanian banks

Moody's Investors Service said it has placed on review for possible downgrade the ratings of three Romanian banks in light of its global review of systemic support indicators for the banking system as well as due to the difficult operating conditions and asset quality challenges.

According to the agency, the bank ratings affected by this rating action are as follows:

• Banca Comerciala Romana SA (Erste Group) with bank financial strength rating of D remains unchanged with stable outlook; global local currency deposit ratings of Baa1/P-2 have been placed on review for possible downgrade; and foreign currency deposit ratings of Baa3/P-3 remain unchanged with stable outlook;

• BRD - Groupe Societe Generale with bank financial strength rating of D+, which maps to a Ba1 baseline credit assessment, has been placed on review for possible downgrade; global local currency deposit ratings of A2/P-1 have been placed on review for possible downgrade; and foreign currency deposit ratings of Baa3/P-3 remain unchanged with stable outlook; and

• Raiffeisen Bank SA with bank financial strength rating of D remains unchanged with stable outlook; global local currency deposit ratings of Baa2/P-2 have been placed on review for possible downgrade; and foreign currency deposit ratings of Baa3/P-3 remains unchanged with stable outlook.

Moody's noted that it previously used the local currency deposit ceiling as the main input for its assessment of the ability of a national government to support its banks.

The agency said that the review of the global local currency deposit ratings of the three banks will look at the extent to which Romania's ability to provide support to its banking system, if needed, is converging with the government's own debt capacity as a result of the ongoing global economic and credit crisis.

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