Fitch downgrades 18 Spanish banks

13 June 2012

Uncertainty regarding the financial future of Spain has intensified further after Fitch revealed it has downgraded another 18 of the country's banks.

In a report released yesterday (12 June), the leading ratings agency underlined the weakness of the Spanish banking system by indicating that lenders' prospects for the future show no signs of improving in the coming months.

Last week, Fitch cut the embattled Iberian nation's sovereign debt rating by three notches to a level of BBB and the country's situation has deteriorated further since then.

On Saturday (9 June), prime minister Mariano Rajoy announced Spain was eager to take as much as €100 billion ($125 billion) in international aid for its ailing banking sector - and this has led to confidence in the nation being undermined further.

"The crisis has contributed to heightened market risk aversion over Spanish debt, affecting funding access and costs for all Spanish banks," Fitch noted.

By Claire Archer

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