Moody's Puts Australia's Banks Under Review

SYDNEY—In a blow to the Australian banking industry, ratings firm Moody's Investors Service unexpectedly placed the country's four largest banks on review for a possible downgrade, citing their dependence on global lending markets.

A downgrade from their current investment grade rating of Aa1—one notch below Moody's top rating—could increase their costs even as they worry that Australia's rising interest rates will crimp profitability. The Reserve Bank of Australia has been raising rates to damp inflation, a move that has slowed credit growth and crimped industries outside the hot resources sector.

The four banks—Australia & New Zealand Banking Group Ltd.,Commonwealth Bank ...

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