Moody’s Investors Service downgraded the ratings of nine Danish financial institutions, including the country’s biggest bank, Danske Bank A/S, saying their loan books have deteriorated which is making it hard to refinance debt.

Danish banks suffer from “a weak operating environment, pressurized asset quality and poor profitability,” the rating company said today in a statement published out of London.

Danske Bank’s deposit rating was cut two steps to Baa1 from A2, after Standard & Poor’s earlier today cut the Copenhagen- based bank’s long-term rating to A- from A. The bank said in a separate statement that it “does not understand Moody’s very negative view” of the Danish banking industry. It had also questioned the reasoning for S&P’s downgrade.

“We have had a close dialog with Moody’s in recent months,” Henrik Ramlau-Hansen, Danske’s chief financial officer, said. “We are certain that Moody’s has heard our arguments, but we do not think they are reflected in the rating the bank has received.”

Denmark’s bank industry is still struggling to emerge from the fallout of its 2010 bail-in package, Europe’s only resolution framework that requires senior creditors to share losses. A burst real estate bubble helped put the economy into a recession last year and sent loan losses surging among many of its regional lenders as agricultural loans soured.

Other Danish banks cut by Moody’s today by two steps included Jyske Bank A/S and Sydbank A/S while Spar Nord Bank A/S and Ringkjoebing Landbobank A/S were cut by one level.

Moody’s also lowered the rating of mortgage lender Nykredit Realkredit A/S and its Nykredit Bank A/S unit, both by three notches.