Last year, the ratings agency downgraded the long-term debt and deposit ratings of the banks along with other banks, Xinhua News reports.
The negative outlook for ING Bank remained the same, though a negative outlook does not necessarily translate to a ratings change but rather indicates that a rating could possibly be lowered.
“The negative outlook is driven by Moody’s view that the operating environment in the Netherlands is becoming more challenging than previously anticipated,” Moody’s said, according to Xinhua News. “This implies greater downside risk in asset quality in areas where the banks have large concentrations, beyond the impact that normal cyclical changes would be expected to have.”
While Moody’s said that the banks were well-capitalized under their current ratings, and therefore resilient to financial downturn, the ratings agency added that further economic shocks outside of normal cyclical changes could have a severe impact on the banks.
The ratings agency cited a potential 0.6 percent reduction in GDP over the next year, as well as an increase in unemployment to 7.7 percent and continued losses in the real estate market, Credit Writedowns reports.