28 Spanish banks hit with new credit downgrades

DHAKA: Moody’s hit 28 Spanish banks with new credit downgrades on Monday, as Madrid formally requested a rescue loan of up to 100 billion euros for the banking sector from its euro zone partners.

Moody’s said the banks face rising losses from commercial real estate loans and that Madrid’s own lowered credit grade also contributed to the rating cuts.

Madrid’s lower creditworthiness ‘not only affects the government’s ability to support the banks, but also weighs on banks’ stand-alone credit profiles’, Moody’s said, reports The Straits Times.

The downgrades, which ran from one to four notches, came on the same day Spain formally requested the emergency funds from the euro zone to strengthen its banks, hit by a crash in the country’s real estate sector.

BDST: 2005 HRS, JUN 26, 2012

Edited by Robab Rosan, Cultural Affairs Editor