Clydesdale Bank in the UK had its long-term credit rating cut from A2 to Baa2 by Moody's Investors Service on Friday. The bank is National Australia Bank's main business in Britain. NAB is rated Aa2 by Moody's at the group level.Earlier this month, Standard & Poor's affirmed the BBB+ long-term rating and A-2 short-term rating of Clydesdale. S&P said then that the outlook was negative.In July, Fitch affirmed Clydesdale's long-term rating at A and its short-term rating at F1.Moody's rationalised the lower rating on the basis that the bank has been "materially weakened". It referred to NAB's decision this year to shrink its business, including pulling out of commercial property lending.Moody's noted: "As a result of NAB's intervention, the bank is well capitalised and has substantial liquid assets, and we see no immediate threat to creditors from its near-term challenges."However, it warned: "The weakness of its franchise and uncertainty over its future strategic direction, alongside NAB's stated intention to sell the bank over the medium term, leaves Clydesdale in an uncertain position."NAB chief executive Cameron Clyne said in a statement: "The downgrade of Clydesdale Bank's credit rating is disappointing given that the restructure of the UK operations announced in 2012 is driving significant improvements in the business and NAB's support for Clydesdale Bank is unchanged."Clyne added: "Clydesdale has a smaller and stronger balance sheet following the transfer of the vast majority of its commercial real estate portfolio to NAB in October 2012, materially improving Clydesdale Bank's risk profile."He also said there had been a significant improvement in the "funding, liquidity and capital position of the business."