Moody's reviews downgrades of eight Spanish Banks

 

Yesterday Moody's Investors Services Placed eight Spanish Banks and a further two holding companies under review for possible downgrades under concerns of the economic weakness and increasing losses due to their exposure to the troubled real estate sector.

The eight banks concerned are: Banco Cooperativo, Banco Sabadell; Bankia and its holding company, Banco Financiero y de Ahorro; Bankinter, CaixaBank and its holding company, La Caixa; Confederacion Espanola de Cajas de Ahorro; Caja Rural de Granada; Ibercaja Banco; and Lico Leasing.

The ratings agency said 21 financial institutions have also had their ratings cut after a review of systemic support.

And it warned yesterday that more Eurozone banks and governments may have their credit ratings cut if they do not find a solution to the sovereign debt crisis soon.

This step was prompted by the credit ratings agency's reassessment of all Spanish banks which have forecast a decline in earnings generation capacity due to a weaker growth outlook for the Spanish economy.