VIENNA: Moody's Investors Service cut its long-term senior debt rating for Austrian lender Erste Group Bank by one notch to A1, citing the bank's plans to start paying back state aid.
It raised its outlook on the rating to stable from negative.
"The downgrade of Erste's senior debt ratings to A1 reflects the reduction in Moody's systemic support assumptions for the bank from those previously factored into the ratings during the financial crisis," the agency said in a statement on Wednesday.
"The bank's senior long-term debt and deposit ratings now take into account the bank's gradual exit from government support mechanisms, as reflected by Erste's planned repayment of the participation capital provided to the bank during the financial crisis."
It said it thought Erste would still benefit as an important bank in Austria from "very high systemic support".
Emerging Europe's number two lender by assets had said last month it was placed to start repaying 1.2 billion euros ($1.69 billion) in capital to the Austrian government without asking shareholders to stump up more cash. [ID:nLDE71N1XJ]
Its shares fell on the rating cut from Aa3 but recovered to trade up 0.8 percent at 36.20 euros
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