Pohjola Bank's financial strength rating has been put on notice of a possible two-notch downgrade, Moody's Investors Service warns.

The assessment comes after Moody's reviewed the strength of banks across Europe, amidst a deteriorating economic environment and weaker creditworthiness of sovereigns.

Moody's first announced in August 2011 that it had put OP-Pohjola Group's B- BFSR, Pohjola Bank plc's Aa2 rating for long-term debt and Pohjola Insurance Ltd's insurance financial strength rating (IFSR) A2 under review for a possible downgrade.

Following a review, Moody's says any downgrade could potentially be two notches, as against a single notch foreseen in August last year.

However, the downgrade threat is mainly focused on Pohjola Bank's long term debt, as it has left unchanged its view on Pohjola Bank Prime-1 short-term debt and deposit ratings.

"Moody's does not expect any downgrade to affect the Aaa rating for covered bonds issued by OP Mortgage Bank," the rating agency said.