BUSINESS

Fitch downgrades Greek banks after sovereign cut

Fitch lowered its ratings of Greek banks Friday in the wake of its cut of the country's sovereign rating.

Fitch put the new rating for the National Bank of Greece, Efg Eurobank Ergasias, Alpha Bank, Piraeus Bank and Agricultural Bank of Greece at CCC, down from B-minus, in the mid-level range for «speculative» or junk bonds.

The move came a day after Fitch cut Greece's sovereign rating to CCC, or «vulnerable to default», over the increased risk that the country would be forced to leave the eurozone.

"In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF program of fiscal austerity and structural reform, an exit of Greece from (the eurozone) would be probable, and/or this could be followed by a withdrawal of international support to Greek banks,» Fitch said.

"A Greek exit would likely result in widespread default on private sector as well as sovereign euro-denominated obligations."

[AFP]

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