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Moody's downgrades 16 Spanish banks

A group of 16 Spanish banks have been downgraded by Moody's, it has emerged.

In a report released this morning (18 May), the leading credit ratings agency announced it has decided to cut the scores of several financiers due to a combination of increasing loan losses and the fact the eurozone crisis continues to rumble on.

Furthermore, the country's National Statistics Institute revealed yesterday that Spain is now officially back in recession after experiencing a gross domestic product contraction of 0.3 per cent in the opening quarter of the year.

With this in mind, Moody's opted to reduce the ratings of 16 of the country's lenders - including its biggest banks Santander and Banco Bilbao Vizcaya Argentaria, which were cut by three notches.

In a statement issued along with its report, Moody's noted: "Banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness."

By Gary Cooper