Moody's downgrades KL banks

Moody's downgrades KL banks

KUALA LUMPUR (Reuters): Rating agency Moody's Investors Service downgraded the debt, deposit and bank financial strength ratings of five major Malaysian banks on Monday, dealing a fresh blow to the country's battered banking sector.

Moody's also placed those same ratings under review for possible further downgrades.

The rating agency said the banks downgraded were Malayan Banking Bhd (Maybank), Bank Bumiputra Bhd, Public Bank Bhd, RHB Bank Bhd and Sime Bank Bhd.

Moody's said the downgrades reflected the increasing risk to creditors of Malaysian entities following the economic policy measures announced by the government.

Malaysia recently imposed sweeping capital controls in a bid to insulate its recession-hit economy from global instability and shield its ringgit currency from speculators, blamed by the government for Asia's financial turmoil.

The banking sector, faced by growing non-performing loans (NPLs), has been badly-hit by the crisis with the profits of some dipping into the red.