Ljubljana, 28 September (STA) - Rating agency Moody's has downgraded its ratings of Slovenia's largest banks, NLB and NKBM, citing the weak credit environment in Slovenia and pressure on the bank's business, the banks said Tuesday.
NLB's long-term bank deposit rating was downgraded from A1 to A3 and its financial strength rating from C- to D+. Moreover, Moody's gave Slovenia's no.1 bank a negative outlook.
NKBM, which had had a worse rating to start with, has been downgraded from A2/D+ to Baa1/D and its outlook is negative.
NLB said in a statement the downgrade was a consequence of the bank's weak financial position and lack of capital, which is reflected in lower profitability and a worsening credit portfolio.
The bank is seeking a EUR 400m capital increase, but it claims it is capable of cushioning the impact of the worsening credit portfolio with existing provisions and capital.
NKBM was downgraded for similar reasons, with Moody's quoting continuing pressure on the banks' financial metrics given the weak credit environment in Slovenia and in other regional markets in which it operates.