S&P downgrades ABN Amro, Rabobank

Standard & Poor's downgraded Dutch banks ABN AMRO, Rabobank and others Friday citing their exposure to a deeper economic slump in the Netherlands and the recession-hit eurozone. The ratings on the two large Dutch banks were cut by one notch each, to A from A+ for ABN AMRO and to AA- from AA for Rabobank. Two other banks, F. van Lanschot Bankiers and SNS REAAL, also were cut by one notch and S&P lowered the outlook on ING Bank, ING Group and Achmea Hypotheekbank to negative, while keeping the ratings unchanged. "In our view, Dutch banks are exposed to increased economic risks as a result of a potentially more protracted downturn in The Netherlands and wider eurozone," S&P said. It added that the prolonged correction in the Dutch property market and government deficit-cutting measures would continue to hit the Dutch economy, "although we expect the overall impact on the banking sector to be moderate." S&P was cautious, saying the Dutch economy remains structurally sound and competitive, and that there is only a low likelihood that banks will experience a sharp increase in housing-related losses. However, it said: "We could see further pressure on our assessment of economic risk in The Netherlands in the event of a more pronounced correction in the eurozone."