Fitch puts Cypriot banks on rating watch negative
Rating agency Fitch has put three Cyprus banks - Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank - on Rating Watch Negative while the bailout drama plays out.
In a statement, Fitch said it took the move because of Cyprus's decision to tax savers (by turning a percentage of their deposits into equity). It also suggested that it could downgrade the banks to 'restricted default' if this occurs.
Fitch said:
The Negative Watches will be resolved after a decision by the Cypriot parliament on the above extraordinary measures, which could come as early as today.
The crystallisation of such significant losses on depositors would constitute a restricted default (RD) under Fitch's rating definitions, in which case the IDRs [individual default ratings] would be downgraded to 'RD'.
