SYDNEY, May 22 (Reuters) - Standard & Poor's on Monday cut its...

SYDNEY, May 22 (Reuters) - Standard & Poor's on Monday cut its ratings of 23 Australian small lenders, including Bank of Queensland (BOQ) and Bendigo and Adelaide Bank (BEN) , due to the growing risk of a sharp correction in property prices.

The agency, however, kept its ratings and negative outlook of the country's five top banks on expectations the Australian government would support them if needed.

The Australian government has taken steps in recent months to cool the red-hot property market amid concerns that speculation in housing could ultimately hurt consumers, banks and the economy. House prices in Sydney and Melbourne have more than doubled since 2009.

"If this downside scenario were to occur, all financial institutions operating in Australia are likely to incur significantly greater credit losses than at present," the ratings agency said.

S&P also raised concerns over the economy's external weaknesses, in particular Australia's persistent current account deficits and high level of external debt.

Among the group of small lenders affected by S&P's ratings downgrade are AMP Bank (AMP) , cut to A to A-plus, and regional lenders Bank of Queensland and Bendigo Adelaide Bank, both of which were cut to BBB plus from A-negative.

Shares in Bendigo and Adelaide Bank fell 1.3 percent and Bank of Queensland slipped 0.8 percent. AMP Bank gained 0.5 percent.

S&P maintained its ratings on Australia's biggest banks, with Australia and New Zealand Banking Group (ANZ) , Commonwealth Bank of Australia (CBA) , National Australia Bank (NAB) and Westpac Banking Corp (WBC) rated AA-minus. Macquarie Bank (MQG) is rated A.