Fitch downgrades Cyprus to BB+, negative outlook

Fitch downgrades Cyprus to BB+, negative outlook
25 June 2012, by William L. Watts - Frankfurt (MarketWatch)
http://www.marketwatch.com/story/fitch-downgrades-cyprus-to-bb-negative-outlook-2012-06-25

Fitch Ratings on Monday cut Cyprus's credit rating to BB+ from BBB- and maintained a negative outlook on the euro-zone country's rating, citing expectations Cypriot banks will need further, substantial capital injections due largely to the institutions' exposure to Greek debt.

In addition to the €1.8 billion ($2.3 billion) required to recapitalize Cyprus Popular Bank, Fitch said it expects the country's banks could need as much as an additional €4 billion (equal to 23% of GDP) in additional capital.

The ratings firm said that while the bulk of the losses suffered by the banking system are due to Greek exposure, the reported non-performing loan ratio for domestic Cypriot loans has also risen substantially over the past year as the country's economy contracted and unemployment rose.

Read the full story: Cyprus requests European bailout http://www.marketwatch.com/story/cyprus-requests-european-bailout-2012-06-25