Riga  - Ratings agency Fitch slapped a fresh round of downgrades on banks in the Baltic states Thursday in the wake of its downgrade of the entire region a day earlier.

The Latvian subsidiaries of Swedish banks SEB and Swedbank saw their Support Ratings downgraded to '2' from '1'.

"Although in Fitch's view the ability and willingness of Sweden- based Skandinaviska Enskilda Banken and Swedbank AB to support their Latvian subsidiaries has not changed, the Support Ratings are now constrained by the Country Ceiling," the agency said.

In Lithuania the outlooks for DnB Nord Bankas' and SEB Bankas' Long-term Issuer Default ratings (IDRs) were changed to 'Negative' from 'Stable'.

On Wednesday Fitch downgraded the long-term foreign and local currency IDRs and the short-term foreign currency IDRs of Estonia, Latvia and Lithuania by one notch.

The action had already resulted in downgrades for Latvian bank Norvik and Lithuanian bank Snoras, plus its Latvian subsidiary, Krajbanka.

The moves "reflect the fast deterioration of the operating environment in Lithuania and Latvia," Fitch said.

Marten Ross, deputy governor of the Estonian central bank said Thursday: "The fact that the rating agency calls in question the sustainability of Estonia's fiscal policy and the country's fiscal deficit reaffirms the significance of strong fiscal policy."

Gitanas Kancerevycius, Snoras bank's director of risk management said his bank's downgrade had been expected and was no cause for concern.

"Last years have shown quite a number of rating actions in the Baltic region, therefore we have expected such a step. Experience shows that downgrades of rivals' ratings have been even more drastic, however Snoras has been able to demonstrate its stable financial standing," he said.(dpa)