Moody's cuts Investec Bank to Baa2

Moody's Investors Service said it lowered Investec Bank (Australia) Ltd.'s long-term senior unsecured ratings to Baa2 from Baa1 and its subordinated debt ratings to Baa3 from Baa2. The bank's financial strength rating of C- and short-term ratings of prime-2 remain unchanged.

The outlook has been changed to negative.

Investec Bank Australia's performance in 2009 was impacted by a large increase in impaired loans, mainly property related lending, which resulted in a significant rise in provision expenses, Moody's said.

The ratings reflect the strong liquidity position it maintains, which almost entirely covers its wholesale funding maturities, the agency said. The bank also has solid capital ratios, which provide strong cover against downside risk, Moody's added.

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