ING Groep NV, Rabobank Nederland and three other Dutch banking groups were cut by Moody’s Investors Service on concern that the recession, regional debt crisis and dependence on wholesale funds makes them vulnerable.
Long-term debt ratings at ING, Rabobank Nederland, ABN AMRO Bank NV and LeasePlan Corporation NV were lowered by two grades, and SNS Bank NV received a one-level cut, Moody’s said in a statement today. KBC Groep NV, Belgium’s biggest bank and insurer, was also lowered two grades, the rating company said.
European policy makers are struggling to contain financial turmoil that forced the Spanish government to seek a 100 billion euro ($126 billion) bailout for its banks on June 9. Mounting concern about Spain’s public finances and Greece’s June 17 elections, which may determine its exit from the euro, are intensifying the crisis, now in its third year.
“Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond,” Moody’s said in the statement. The Netherlands “is affected by the ongoing euro area debt crisis and regional economic weakness,” it said.
ING Groep is now rated A3, while its ING Bank unit was also downgraded two levels, to A2. Rabobank Nederland was lowered to Aa2, the third-highest investment grade, ABN AMRO to A2, and LeasePlan Corp. to Baa2. SNS is now Baa2. ING’s ratings have a negative outlook and those of the other lenders are stable, it said.
Brussels-based KBC Group was lowered two levels to Baa1, and its KBC Bank unit to A3, according to a separate statement.
Central banks intensified warnings that Europe’s failure to tame its debt crisis threatens to roil the world’s financial markets and economy, while Greece’s election in two days looms as the next flashpoint for investors. Monetary policy makers from the U.K. to Japan and Canada sounded the alert about potential fallout from the single currency bloc’s troubles.
Still, the domestic environment for Dutch banks has weakened less than in other parts of the euro region, given the country’s Aaa debt rating, Moody’s said.
Europe’s turmoil this week forced Spain to ask for a bailout of its banks, making it the fourth and largest euro-zone economy to seek aid.
Moody’s last month lowered the ratings of 16 banks in Spain, including Banco Santander SA, as well as 26 Italian banks, such as UniCredit SpA and Intesa Sanpaolo SpA. The rating company put 114 European banks and an additional eight non- European firms with large capital-markets businesses under review in February to assess the impact of Europe’s debt crisis.
The rating company today also downgraded UniCredit’s leasing unit, UniCredit Leasing S.p.A, by two levels to Baa2 from A3.
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