Espirito Santo, Portugal’s largest publicly traded bank by market value, had its debt rating lowered one level to Ba3, Moody’s said yesterday in a statement. It took the same action forCaixa Geral de Depositos SA and Banco BPI SA. (BPI) Banco Internacional do Funchal was downgraded to B1 from Ba3.

Portugal was among six European nations, along with Spain and Italy, to have debt ratings cut by Moody’s Feb. 13 as the region’s government-debt crisis spurs austerity programs that may undermine growth. Yesterday’s moves give the four banks grades on par with or lower than Portugal’s, which fell to Ba3 from Ba2. Banco Santander Totta SA, the Portuguese unit ofSpain’s largest lender, was cut two levels to Ba1 from Baa2.

Downgrades of the nation’s lenders were generally driven by “expected further deterioration of banks’ domestic asset quality” and firms’ prolonged difficulty accessing private wholesale funding sources, Moody’s said in the statement. “While none of these pressures are new, in Moody’s view they continue to mount against the backdrop of the ongoing euro debt crisis.”

E-mails sent after regular business hours seeking comment from each of the five banks weren’t returned.

To contact the reporter on this story: David Scheer in New York at dscheer@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

http://www.bloomberg.com/news/2012-03-28/espirito-santo-among-five-portugal-banks-downgraded-by-moody-s.html

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