Clydesdale Bank has been downgraded by a leading credit rating agency.
Moody's announced after the markets closed last night that it was reducing the National Australia Bank (NAB)-owned company's long-term deposit and senior debt rating from A2 to Baa2.
The agency said its short-term debt and deposit rating is to be cut by one notch. Moody's lowered the bank's baseline credit assessment on Monday.
Moody's said it was due to long-term structural challenges from its weakened franchise and previous "risk-management/control weaknesses".
NAB is facing continuing difficulties over mis-selling claims and recently increased compensation provisions for its UK arm.
Moody's said Clydesdale's efforts to address these challenges by strengthening its risk management and controls framework and improving efficiency through savings will take some time to be effective.
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