Moody's: Erste under review

Moody's Investors Service said it placed on review for downgrade Erste Group Bank AG's stand-alone bank financial strength rating of C-, which maps to Baa1 on the long-term scale, and the A1 long-term debt and deposit ratings.

Consequently, several subordinated and junior subordinated debt ratings were placed on review for downgrade. The P-1 short-term rating was affirmed.

The review for downgrade on the bank financial strength rating follows the bank's report of a major loss that partly stems from previously undisclosed credit default swap exposures.

Accordingly, Moody's said the review will focus on Erste's risk management, internal controls and financial transparency as well as the risk-adjusted profit generating capacity of its business model. The review for downgrade of the A1 long-term ratings follows the review on the bank financial strength rating.

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