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S&P cuts ratings on 15 Spanish banks after sovereign downgrade
October 16, 2012 / 7:46 AM / 5 years ago

S&P cuts ratings on 15 Spanish banks after sovereign downgrade

MADRID, Oct 16 (Reuters) - Ratings agency Standard & Poor’s cut the rating of 15 of Spain’s banks on Tuesday after downgrading the sovereign to one notch above junk with a negative outlook on Friday as investors await a decision from Madrid on a request for aid.

S&P cut the long-term rating on 11 banks and the short-term rating on four other lenders.

The agency assigned negative outlooks on the long-term ratings of Spain’s largest bank Santander and second largest BBVA.

The agency said it expected to conclude its review of the wider implications of the sovereign downgrade on the banks’ ratings in November.

Spain’s banks, hit by a prolonged recession and burst property bubble, face a capital shortfall of 59.3 billion euros ($76.7 billion), according an independent audit published end-September.

Madrid has been offered a credit line of up to 100 billion euros to help recapitalise its banks, though has said it will only need around 40 billion euros of that.

Spain is the latest focal point of the euro zone debt crisis and the government is facing increasing pressure to apply for a European aid package which would kick start bond buying programme by the European Central Bank. ($1 = 0.7730 euros) (Reporting By Paul Day; Editing by Hans-Juergen Peters)

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