Reuters: Financial Services and Real Estate: Moody's downgrades several Austrian banks

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Moody's downgrades several Austrian banks Jun 6th 2012, 01:17 NEW YORK, June 5 | Tue Jun 5, 2012 9:17pm EDT NEW YORK, June 5 (Reuters) - Moody's Investors Service on Tuesday downgraded the credit ratings of Austria's three largest banking groups, citing the risk of further shocks as the euro zone debt crisis continues to roil global markets. The agency cut the long-term rating for Erste Group Bank AG to A3 from A1 and assigned a negative outlook while UniCredit Bank Austria AG was cut to A3 from A2, also with a negative outlook. Raiffeisen Bank International AG was cut to A2 from A1 and assigned a stable outlook. In addition to risks from the euro zone crisis, Moody's cited their exposure to Eastern Europe and the Commonwealth of Independent States region as well as their limited capital buffers as factors behind its ratings action. "While Austrian banks have improved capital and reserves, loss-absorption capacity in an adverse scenario remains below that of many European banking peers," it said in a statement. Moody's did note several mitigating factors for Austrian banks, including solid franchises and a relatively stable domestic environment. The credit rating agency also downgraded several German banks on Tuesday, part of a broader review of European banking systems that has also seen recent cuts to bank ratings in Italy and Spain, among others.

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