Standard and Poor's downgrades 10 Spanish banks

15th December 2011, Comments 0 comments

Standard and Poor's downgraded Thursday the credit rating of 10 Spanish banks after applying new criteria, and warned it may lower their short-term scores further.

The 10 banks had their ratings lowered and remained in "creditwatch with negative implications", indicating the risk of a further downgrade, Standard and Poor's said in a statement.

The agency "reviewed its ratings on 10 Spanish financial institutions by applying its new ratings criteria and updated group methodology for banks," it said.

"Various ratings on these 10 financial institutions remain on CreditWatch with negative implications."

The change affected CaixaBank, Bankia, Banco Popular, Bankinter, Banco de Sabadell, the holding company Caja de Ahorros y Pensiones de Barcelona, Ibercaja Banco, San Caja de Ahorros y Monte de Piedad de Gipuzkoa y San Sebastian, Bilbao Bizkaia Kutxa and Banco Financiero y de Ahorros.

Spain was forced to restructure its financial sector after it was ravaged by the bursting of the property bubble in 2008.

Another major ratings agency, Moody's, has warned it might cut the ratings of a number of Spanish banks including Bankia and Sabadell, citing both their real estate exposure and weaker ability to generate earnings.

© 2011 AFP

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