NEW YORK, June 12 Fitch Ratings on Tuesday
downgraded 18 Spanish banks less than a week after the agency
cut the country's sovereign debt rating, underscoring the
potential for lenders' assets to deteriorate further.
Fitch, which already cut Santander and BBVA on Monday, cut
the ratings for CaixaBank, Bankia, Banco Popular Espanol and
"In particular, Spain is expected to remain in recession
through the remainder of this year and 2013 compared to the
previous expectation that the economy would benefit from a mild
recovery in 2013," Fitch said in a statement.
"The institutions affected by today's rating actions are
purely domestic banks. Thus, their revenue generation capacity,
risk profile, funding access and cost of funding are highly
sensitive to the evolution of Spain's economy and its housing
Last week Fitch slashed Spain's rating by three notches to
Moody's Investors Service rates Spain A3, and Standard and
Poor's rates the country BBB-plus. Those ratings, as well as
that of Fitch, carry a negative outlook.
Euro zone finance ministers agreed on Saturday to lend Spain
up to 100 billion euros to shore up its teetering banks. Madrid
said it would specify precisely how much it needs once
independent audits report in just over a week.
Spain's banks have been beset by bad debts since a property
The Spanish government has already spent 15 billion euros
bailing out small regional savings banks that lent recklessly to
property developers. Spain's biggest failed bank, Bankia
, will cost 23.5 billion euros to rescue, and its
shareholders have been wiped out.