International credit rating agency Moody's this morning downgraded the credit ratings of six German banks, including the country's number two Commerzbank.
It also downgred three major Austrian banks.
Moody's said in a statement it was downgrading by one notch the credit ratings of Commerzbank, DekaBank, DZ Bank, regional banks LBBW, Helaba and NordLB in view of "the increased risk of further shocks emanating from the euro area debt crisis, in combination with the banks' limited loss-absorption capacity."
Moody's confirmed the credit ratings of another regional state bank, WGZ Bank, and said its review of the ratings of Germany's biggest lender, Deutsche Bank, was still ongoing.
In addition, Moody's said it has assigned stable outlooks to the ratings of most German banks.
The ratings of two groups -- Commerzbank and WGZ Bank -- "carry negative outlooks, reflecting bank-specific vulnerabilities to a possible further deterioration of the environment," it said.
The downgrades come as part of a wider review of 114 European banks announced back in February and Moody's noted that a number of factors "have caused the ratings of many German banks to decline by less than for other European banks."
One mitigating factor was the "comparatively benign operating environment in the German home market, supported by below-average unemployment, low household and corporate debt levels and the general resilience of the German economy," Moody's said.
Another factor was the "modest funding risk of many German banks, underpinned by broadly matched maturity profiles, recurring access to intra-sector funds and improved liquidity buffers.
"Moreover, Moody's recognises the steps German banks have taken to address past asset quality challenges; however, as stated above, significant downside risks remain," the statement said.
Moody's also cut its debt rating on Austria's three biggest banks -- Erste Bank, Raiffeisen Bank International (RBI) and Bank Austria, an offshoot of Italy's UniCredit group.
The move was largely due to their exposure to the financial crisis in eastern Europe.
The ratings agency said in a statement that Erste Bank and RBI were strongly exposed in eastern Europe, notably in Hungary and Romania, while the downgrade of Bank Austria was justified by its Italian parent's precarious situation.
Erste Bank was downgraded by two notches to A3 while the others went down by one notch, RBI to A2 and Bank Austria to A3.
Prospects for Erste and Bank Austria were "negative" while RBI was put at "stable".
The downgrades came despite the three banks reporting excellent results last month.
Raiffeisen said it had doubled its net profit for the first quarter to 541 million euros, surprising analysts.
Erste notched up first quarter profits of 346.5 million euros, compared with 321.4 million a year earlier, while Bank Austria's first quarter profits came to 399 million euros, up by 17 percent over the same period in 2011.