Moody's downgrades 30 Spanish banks

24th March 2011, Comments 0 comments

The Moody's ratings agency on Thursday downgraded the ratings of 30 Spanish banks, a direct consequence of its decision earlier this month to downgrade indebted Spain's sovereign rating.

Moody's said the latest downgrades reflected heightened financial pressures on Spain's sovereign credit and that of "many" weak banks, and decline of the importance of smaller banks amid rapid consolidation in the sector.

Another negative factor was the expectation of a weaker support for banks across Europe.

However Moody's left unchanged the ratings of Spain's three biggest banks -- Santander, BBVA and La Caixa, listed as Criteria CaixCorp.

Of the 30 targetted banks which saw their debt and deposit activities downgraded 10 were pushed down by one notch, 15 banks by two notches and five banks by three or four notches.

"The outlook on most banks' senior debt and deposit ratings remains negative, reflecting the negative outlook on the sovereign rating and the negative outlook on banks' standalone credit profiles, given the challenging operating environment in Spain," Moody's said.

On March 10 Moody's sliced Spain's long-term credit rating by a notch to "Aa2" and warned it may do so again, pounding financial markets as it raised the alarm over Spanish banking woes and spendthrift regions.

© 2011 AFP

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