March 19, 2020 / 12:33 PM / 11 days ago

Moody's says coronavirus is negative for credit ratings of French banks

PARIS, March 19 (Reuters) - Moody’s ratings agency said on Thursday that French government measures would stem a potential wave of bankruptcies due to coronavirus, but added that French banks’ credit losses would rise nevertheless.

“Banks’ profitability will come under pressure due to weaker lending activity, fewer fee generating transactions, and higher cost of risk,” Moody’s said.

It added that any reduction in banks’ liquidity was likely to be modest, helped by the ECB’s new targeted longer-term refinancing operations and the enlarged pool of eligible collateral decided by the Bank of France. (Reporting by Maya Nikolaeva; Editing by Alex Richardson)

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