ECONOMY

Banks’ turn for ratings cut by Fitch

Fitch Ratings revised its ratings on five Greek banks yesterday after the agency downgraded Greece’s sovereign ratings. The ratings agency downgraded the Support Rating Floors of the country’s four largest commercial banks, National, Alpha, EFG Eurobank and Piraeus, by one notch. «Fitch believes the government’s propensity to support banks remains unchanged, but that its ability to do so has been reduced as reflected in the downgrade of Greece’s Long-term IDR to A-,» it said in a statement. On Thursday, the credit rating group downgraded its rating on Greece to A- from A after the Socialist government doubled its expected budget deficit for 2009 to more than 12 percent of gross domestic product. News of the higher-than-expected deficit will also harm Greece’s efforts to lower its public debt while continual revision of fiscal data is harming Greece’s credibility, added the agency. Fitch also lowered its long-term rating on state-controlled ATEbank. Meanwhile, the premium which investors demand to hold 10-year Greek government bonds rather than eurozone benchmark German Bunds rose to 138 basis points yesterday after the downgrade late on Thursday. The 10-year Greek bond yield spread widened from 132 basis points at the European settlement close on Thursday.