International ratings agency Moody's has downgraded its rating for the Belgian bank at the center of the financial group that controls one of the Czech Republic's biggest banks, CSOB. Moody's marked down KBC Bank's long-term senior debt and deposit rating from A1 to Aa3 and at the same time downgraded from A1 to A2 the KBC Group's senior debt rating.

For the core Belgian bank, the agency cited "increased uncertainty" that the group could pay back aid offered during the financial crisis by the national and regional Flemish governments by the deadline of 2013 set by the European Commission while at the same time meeting more stringent capital adequacy requirements. This, it warned, might spark fresh conditions from Brussels.

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CZECH REPUBLIC: Czech CSOB owner in debt rating downgrade