Fitch downgrades Cyprus banks to junk level

NICOSIA, Cyprus (AP) -- Credit ratings agency Fitch has downgraded Cyprus' top three commercial banks by a notch each to junk status.

Fitch said Thursday's downgrade of the Bank of Cyprus, Marfin Popular Bank and Hellenic Bank from BBB- to BB+ is in line with a one-notch cut to Cyprus' sovereign rating last week to just above junk status.

The agency said the sovereign downgrade — mainly due to the banks' large exposure to Greek debt — reduces the government's ability to support the banks which could, however, receive international backing if needed.

Fitch says it also expects more pressure on the banks if Greece agrees to cut between 50 to 70 percent from the value of its privately-held bonds.