Moody's Investors Services downgraded some of its credit ratings on six Czech financial institutions, and said the outlook was negative, reflecting their vulnerability if the economy worsens more than expected.
The credit rater ended its review for possible downgrades begun May 25 for five of the financial companies, though Home Credit AS will remain on review owing to its status as a consumer-finance company.
Moody's said it considers the ability of the Czech Republic - where opposition accusations of mishandling of the economic crisis toppled the government in March - and its central bank to support lenders to be more closely aligned with the government's own fiscal flexibility.
Before the financial crisis and global recession, Moody's didn't expect systemic government support would be required to support banks and the state's ability to support the lenders was higher, benefiting some ratings at the time.
Moody's downgraded the long-term local currency ratings of Ceska Sporitelna, Komercni Banka and Ceskoslovenska obchodni Banka, by one notch to A1, six notches above junk territory, while affirming their long-term foreign currency and bank financial strength ratings.
The credit rater downgraded the Czech Export Bank Aaa rating by one notch to Aa1, and lowered J&T Banka two notches to Ba1, one notch into junk territory. BH Securities' ratings were confirmed.
