Moody’s cuts Chugoku Bank, view to stable

Moody’s Investors Service said it downgraded Chugoku Bank, Ltd., including its long-term issuer rating to A2 from A1.

In a press release, Moody’s attributed the downgrade to “structural challenges the bank faces in maintaining profitability, amid persistently low domestic interest rates and severe competition among banks. Continuously declining profitability has weakened the bank’s ability to absorb losses, challenging the sustainability of the bank’s business model.”

Moody’s also changed the outlook to stable from under review. The agency said it expects Chugoku to keep its loan quality strong.

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