Moody's downgrades 25 smaller Spanish banks

16th June 2009, Comments 0 comments

International ratings agency Moody's Investors Service said it had downgraded 25 Spanish banks.

Madrid – International ratings agency Moody's Investors Service said Monday it had downgraded 25 Spanish banks but maintained its position on the country's two largest -- Banco Santander and BBVA.

In a statement, Moody's said the long-term ratings of Banco Santander and BBVA were left at Aa1, on watch for a possible downgrade.

It said that 18 of the smaller 25 banks had their ratings cut by one notch, with the rest lowered by two notches because of the growing pressure on asset quality as a result of the global financial crisis that has pushed Spain into a deep recession.

Moody's also said the downgrades were modest because of the Spanish government's oversight of and support for the banking system which has meant that the banks have avoided the massive losses of their peers elsewhere.

Last week, the government said it expected the economy to contract 3.6 percent this year, up from the 1.6 percent forecast previously, with unemployment remaining very high for several years.

AFP / Expatica

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