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Moody's downgrades Qatar's Commercial Bank, Doha Bank

Moody's on May 21 downgraded the long- and short-term deposit ratings of Qatar-based lenders Commercial Bank PSQC and Doha Bank QPSC to A3/Prime-2 from A2/Prime-1, with the outlooks on the long-term ratings remaining negative.

The rating agency also downgraded the Qatari banks' baseline and adjusted baseline credit assessments to "ba1" from "baa3" and their long-term counterparty risk assessments to A2(cr) from A1(cr).

Meanwhile, the rating agency affirmed the banks' short-term counterparty risk assessments at P-1(cr).

The downgrade of the long-term ratings reflects a similar action on the bank's baseline credit assessment, which according to Moody's was driven by deterioration in the lenders' asset quality, among other factors.

The negative outlook reflects a reduction in the Qatari government's capacity to provide support to the lenders if needed, among other factors, Moody's said.