S&P lowers rating of 15 Spanish banks
Standard & Poor's (S&P) has downgraded the credit ratings of 15 Spanish banks, one month after reducing the Spanish government’s overall rating. S&P announced that it had lowered its credit ratings on 10 Spanish banks by one notch and cut its ratings of another five by two notches.
"We expect the Spanish banking system's profitability to remain below its historical average over the medium term as banks continue to operate in an unfavourable economic and financial environment," the ratings agency said.
Spain's biggest bank, Santander, was lowered to A+ from AA-, while BBVA, the country’s second-largest bank, was reduced to A from A+.
S&P reduced its rating on Spain’s long-term debt to A from AA- on January 13. Earlier, Fitch Ratings also cut the credit rating of Santander and BBVA and two other large Spanish banks, Bankia and Caixabank.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs. Analysts say Spain's economy is expected to enter into a new recession in the first two quarters of 2012.
The worsening eurozone debt crisis has raised Spain's financing costs and created fears that the European country might have to seek an EU bailout like Greece.