Agencies continue to lower ratings on Portugal and Portuguese banks and companies

7 April 2011

Lisbon, Portugal, 7 April – Credit rating agency Moody’s Wednesday lowered its long term and deposit rating on seven Portuguese banks, following the cut announced Tuesday by the agency on Portuguese sovereign debt.

The banks covered by the cut are state bank Caixa Geral de Depósitos, Millennium bcp, Banco Espírito Santo, Banco BPI, Santander Totta, Montepio Geral and Banco Português de Negócios (BPN), due to a weakening of their credit profile.

Outlook is negative or for a downward review for six banks, except in BPN’s case, which is still being analysed.

The weakening of the autonomous financial strength of these banks is one of the reasons given, as well as the State’s reduced financial capacity, which Moody’s says increases the likelihood that in future the Government will limit its support for the banking sector.

On Tuesday, ratings agency Fitch lowered its ratings on Portuguese banks following a cut to Portugal’s debt rating, last Friday.

Fitch lowered ratings on Montepio Geral, Finibanco and Banif to junk status, which means they are no longer considered investment grade, whilst the ratings for BCP, BPI and Caixa Geral de Depósitos fell to BBB-, thus equalling Portugal’s sovereign debt rating.

Moody’s also lowered its rating on state companies Parpública, Rede Ferroviária Nacional (Refer), RádioTelevisão Portuguesa (RTP) and Caminhos de Ferro de Portugal (CP), all to junk status, reflecting the reduced rating of the Portuguese state. (macauhub)