Standard & Poor’s lowered Banco Comercial Português’s long term rating from B+ to B on Thursday and changed the outlook on its ratings of Caixa Geral de Depósitos and Banco Santander Totta from stable to negative.

The rating agency on 5 July revised its outlook on the Portuguese sovereign from stable to negative on growing political uncertainty and said on Thursday that it now sees a negative trend for economic and industry risks in the Portuguese banking sector.

“The negative outlooks on all Portuguese banks reflect the challenges they face as a result of the tough operating environment and other bank-specific factors,” said S&P.

It said that the risk profile of Banco Comercial Português (Millennium bcp) is weaker than its peers’, making it more vulnerable to the difficult environment. The bank has accumulated more problem loans than the system average and its asset quality has deteriorated more quickly, noted S&P.

The rating agency said its revision of the outlooks of CGD and Totta mirror its action on the sovereign’s outlook.

“A lower sovereign rating would constrain our ability to incorporate extraordinary government support into the ratings on CGD if its standalone creditworthiness were to deteriorate,” said S&P. “Similarly, a lower sovereign rating would constrain our rating on Totta. This is because we generally do not uplift the rating on non-core subsidiaries above the sovereign rating of the subsidiary’s host country, based on group support.

Other Portuguese banks rated by S&P had their ratings affirmed.