- Title: SPAIN: Rating agency Standard and Poor's downgrades 10 Spanish banks
- Date: 13th October 2011
- Summary: MADRID, SPAIN (OCTOBER 12, 2011) (REUTERS) VARIOUS OF SANTANDER BANK EXTERIORS VARIOUS PEOPLE ON STREET (SOUNDBITE) (Spanish) JOSE MARIA GARCIA, MADRID RESIDENT, SAYING: "It's very bleak, but I don't know we have to trust, otherwise it will be a catastrophe for Spain and Europe." VARIOUS PEOPLE ON STREET (SOUNDBITE) (Spanish) RUBEN HERRERO, MADRID RESIDENT, SAYING: "It's very bad, totally wrong with patch-up measures so they evidently don't yield any results. We need structural measures not conjunctural ones to improve the economy." VARIOUS BBVA EXTERIORS VARIOUS BANESTO EXTERIORS
- Embargoed: 28th October 2011 13:00
- Location: Spain, Spain
- Country: Spain
- Topics: Business,Finance,Politics
- Reuters ID: LVA9OW2EWW1RX4XUZEK83QI0Y1GT
- Story Text: Standard & Poor's on Tuesday (October 11) downgraded 10 Spanish banks by one notch, including giants Santander and BBVA, warning that the country's banking sector will further deteriorate in the next 15 to 18 months.
The outlook on all Spanish financial institutions S&P rates is now negative, reflecting the possibility of further downgrades if the economy slows down more than anticipated.
The Socialist government of Prime Minister Jose Luis Rodriguez Zapatero has applied a series of austerity measures to get the economy back on track.
As Spaniards prepare for a November 20 general election the opposition Popular Party is expected to win, the mood on th streets on the prospects of the economy ranges from resignation to outright negativity.
"It's (the future) very bleak, but I don't know we have to trust, otherwise it will be a catastrophe for Spain and Europe," Madrid resident Jose Maria Garcia said.
Ruben Herrero, another Madrid resident, said the current economic policy was not working.
"It's very bad, totally wrong with patch-up measures so they evidently don't yield any results. We need structural measures not conjunctural ones to improve the economy," he said.
S&P, which rates Spain at AA-minus with a negativeoutlook, forecast the level of troubled assets in the country's banking system will continue to rise throughout 2012 and possibly into early 2013 given a sluggish real estate sector.
"In our view, Spain's economy faces dimming growth prospects in the near term, real estate market activity remains depressed and turbulence in the capital markets has heightened," S&P said in a statement.
The banks downgraded were: -- Banco Santander S.A.: AA-minus from AA.
S&P also lowered the long-term counterparty credit ratings on core subsidiaries whose ratings are equalized with those on the parent company, namely Spanish subsidiaries Banco Espanol de Credito S.A. (Banesto), Santander Consumer Finance, S.A. (SCF), and U.K. subsidiary Santander UK PLC. Banco Bilbao Vizcaya (BBVA)Argentaria S.A. BBVA: AA-minus from AA. -- Savings bank Confederacion Espanola de Cajas de Ahorros (CECA): cut to A-minus from A. -- Savings bank Caja de Ahorros y Monte de Piedad de Zaragoza, Aragon y Rioja (IberCaja): to A-minus from A. -- Savings banks Caja de Ahorros y Monte de Piedad de Gipuzkoa y San Sebastian (Kutxa) and Bilbao Bizkaia Kutxa (BBK): to A-minus from A.
S&P changed the CreditWatch placements of the long-term ratings on both Kutxa and BBK to negative from developing.
-- Bankinter SA: to A-minus from A.
-- Banco de Sabadell SA: to A-minus from A.
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