Moody's cuts credit outlook from eight banks in China due to quality decline, report

Moody’s Investors Service cut its outlook for eight banks in China, moving it from stable to negative. 

This comes one day after a downgrade to China's government credit ratings, according to CNBC News.

The biggest Chinese lenders were downgraded, including Bank of China, China Construction Bank Corporation, Industrial and Commercial Bank of China and Agricultural Bank of China. 

“The change in outlook to negative from stable on these banks is directly driven by a potential decline in the rating or credit quality of the central government, given the change in the sovereign rating outlook,” Moody’s said in a statement, CNBC reports. 

Hong Kong’s outlook was also lowered from stable to negative. 

These downgrades show concerns over China’s increasing debt level and its effect on GDP growth in the economy.