Fitch cuts Cyprus sovereign rating to B citing banking sector

NEW YORK Fri Jan 25, 2013 2:13pm EST

NEW YORK Jan 25 (Reuters) - Fitch Ratings on Friday cut euro zone member Cyprus's sovereign credit rating to B from BB-minus citing the likelihood the government is going to have to put more financial support behind the country's ailing banking sector.

"Uncertainty regarding the capital needs of the cooperative banks remains. Including the latter, the total recapitalization costs of the banking sector could be up to 10 billion euros, although Fitch anticipates that this figure may include a degree of headroom," Fitch said in a statement.

The credit outlook on the government remains negative.

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