Fitch cuts ratings on five European banks

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LONDON (ShareCast) - The slew of ratings downgrades for European banks' debt ratings, due to the sovereign debt crisis, continues unabated. Last night Fitch Ratings cut its long-term debt ratings for five large European banks because of the "stronger headwinds" that the financial sector is now encountering. Specifically, the credit rating agency downgraded French banks Crédit Agricole (to A+ from AA-) and Banque Federative du Crédit Mutuel (to A+ from AA-), Finnish Pohjola Group (to A+ from AA-), Holland's Rabobank (to AA from AA+) and Denmark's Danske Bank (Copenhagen: DANSKE.CO - news) (to A from A+). Fitch, however, noted that while the outlook on Danske is negative those for the other banks remain stable. One of the main reasons for the downgrades on Crédit Agricole and Danske Bank is their exposure to eurozone countries through their subsidiaries. Although the agency considers that all five have shown an improvement in their capital positions, developments in the global economy and a significant shift in market confidence towards the banking sector were the primary drivers for the downgrades, the ratings agency explained. JM