Which spanish banks have been downgraded

Bond investors pushed Spain's borrowing costs higher, a sign of wilting confidence in the country's ability to support its banks.

The downgrades reflect Moody's view on the ability of the 28 banks to repay their debts. Moody's said the lower ratings stemmed from its having downgraded the Spanish government's credit rating by three notches earlier this month. Among the lenders suffering rating cuts were Spain's two biggest international banks: Banco Santander and Banco Bilbao Vizcaya Argentaria. Latest Must Read Markets. The downgrades of the Long-term IDRs reflect similar concerns to those that have affected the Spanish sovereign rating.

In particular, Spain is expected to remain in recession through the remainder of this year and compared to the previous expectation that the economy would benefit from a mild recovery in 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 market. The sovereign rating acts as a cap for the Long-term IDRs of these domestic financial institutions. In Fitch's opinion, the weak Spanish economy will continue to affect business volumes which, together with low interest rates, will place pressure on revenues.

Banks are being challenged to further increase loan impairment coverage levels for real estate assets while complying with stringent capital requirements. Some institutions are more vulnerable than others. CaixaBank and Bankia, S. These banks' Support Ratings have been affirmed at '2' but the change in SRF indicates a weakening of Spain's ability to support some of its largest banks, following the downgrade of the sovereign rating.

The recent downgrade of Spain's sovereign ratings by three notches already factors in the likely fiscal cost of restructuring and recapitalising the Spanish banking sector estimated by Fitch to be between EUR50bn to EUR60bn under its base case and as high as EURbn under a stress scenario. The Support Ratings and SRFs assigned to Spanish banks take into account the expectation that support for the banks will be forthcoming.

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