Moody's may cut 3 French banks

Moody's Investors Service said it placed the long-term debt and deposit ratings of three French banking groups - Credit Agricole SA, BNP Paribas SA and Societe Generale SA on review for possible downgrade.

The primary focus of all three reviews will be the banks' credit exposures to Greek government debt and the Greek private sector and the potential for inconsistency between the impact of a possible Greek default and restructuring and current rating levels, Moody's said.

Moody's also noted that exposures to Greece are to be included within the ongoing review for possible downgrade of Dexia Group's core operating banks.

The ratings on downgrade review include: Credit Agricole adjusted baseline credit assessment of Aa3 and a senior long-term rating Aa1; BNP Paribas's B-, A1 and Aa2 ratings; and Societe Generale's C+, A2 and Aa2 ratings.

The short-term prime-1 ratings on the three French banking groups have been affirmed.

Moody's noted that the reviews of Credit Agricole and BNP Paribas are unlikely to lead to downgrades of more than one notch.

Societe Generale's debt and deposit ratings could be downgraded by as much as two rating notches because its review will include a reassessment of the uplift it receives from systemic support, which is currently higher-than-average for the French banking system, the agency said.

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