Fitch Ratings, citing the potential of loans at some lenders to deteriorate, cut its credit ratings on 18 Spanish banks, including Bankia SA (BKIA), after its downgrade of Spain last week.
Bankia’s long-term issuer default rating was cut to BBB from BBB+ with a negative outlook, the ratings company said in an e-mailed statement today. CaixaBank (CABK) SA was reduced to BBB from A-, Banco Sabadell SA to BBB from BBB+ and Banco Popular Espanol SA (POP) to BBB- from BBB, Fitch said.
Spain on June 9 sought a European bailout of as much as 100 billion euros ($125 billion) to support ailing lenders, the fourth euro member to seek a rescue since the debt crisis started almost three years ago.
Fitch, which estimates the capital needs of Spanish banks at as much as 60 billion euros under a “base case” scenario, said it had considered its sovereign downgrade for Spain on June 7 and also the potential for loans of certain banks to worsen in taking today’s actions on the lenders.
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