TOKYO -- Moody's Investors Service Inc. said it is reviewing ratings of two of the 25 largest Japanese banks, Daiwa Bank and Chiba Bank, for possible downgrades.

Moody's cited the banks' exposure to Japan's ailing real estate market and a squeeze on profitability amid intensifying competition.

The Daiwa Bank action affects $1 billion of debt. Moody's said the bank's "core earnings may come under significant pressures because of its growing vulnerability" to deterioration of its assets. Moody's said the bank's real estate loans were "significant in relation to its earnings."

Moody's is reviewing Daiwa's Double-A-3 ratings on senior debt, long-term deposits, and long-term standby letter-of-credit obligations. Ratings of Daiwa finance affiliates are also under review.

Regarding Chiba Bank, Moody's cited the concentration of realty loans and tougher competition.

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