Fitch cuts ratings on 18 Spanish banks
2012-06-13 16:35:25
The international ratings agency Fitch said Tuesday that it had downgraded another 18 Spanish banks a day after cutting its ratings on the two biggest banks, Santander and BBVA despite a massive sector bailout.
Fitch, which cut Spain's sovereign debt rating by three notches last week to "BBB", said its latest downgrade of Spanish banks was the result of "the potential for the loan portfolios of certain banks to deteriorate further."
"This is particularly true for those banks whose loan books are heavily exposed to the construction and real estate sectors, and those with low equity bases."
Among the 18 banks was CaixaBank, the third biggest Spanish bank in terms of market capitalisation, which was downgraded two notches to "BBB."
Bankia, which is to receive 23.5 billion euros in public aid, was cut one notch and is now also at "BBB."
On Monday, Fitch said it had downgraded Santander and BBVA to "BBB+" from "A", placing them just three levels above junk territory but one notch above Spain itself.
On Saturday, Spain said it would seek up to 100 billion euros ($125 billion) in European financial aid to underpin a fiancial sector that is weighed down by a huge number of risky real-estate loans.
Eurozone finance ministers said they would approve the funds but financial markets are now wondering if new official creditors will take priority over private investors should Madrid in fact default on the international aid.