View more on these topics

Moody’s downgrades Spanish banks

Ratings agency Moody’s Investors Service has downgraded 28 Spanish banks, over the weakening of the Spanish government’s creditworthiness.

Moody’s was prompted to cut long-term debt and deposit ratings on the banks – by between one and four notches – over concerns of creditworthiness, which has already seen it downgrade Spanish government bond ratings.

Three banks were downgraded by one notch, 11 banks were downgraded two notches, 10 banks by three and six banks by four notches.

The ratings agency claimed its assessment of Spanish sovereign creditworthiness and its ability to support banks was a contributing factor, as was the sector’s exposure to commercial real estate.

Moody’s will assess the impact of recapitalisation on banks’ creditworthiness – which the Spanish government has approached the Eurogroup for support – once final details have been published.

Banco Santander and Santander Consumer Finance are placed one notch higher than the Spanish government’s rating, due to their “high degree of geographical diversification of their balance sheet and income sources, and a manageable level of direct exposure to Spanish sovereign debt relative to their Tier 1 capital”.

Moody’s believes there are difficulties in establishing “credible” valuations within the commercial real estate sector because of restricted liquidity.

Further downward pressure on ratings could come if operating conditions worsen, asset quality deteriorates and pressures on market funding intensify, according to the ratings agency. Upward pressure on ratins would come from implementation of the Spanish government’s plans to stabilise the banking system, stronger earnings, improved funding conditions or by addressing asset quality challenges, reports Moody’s.


Shine: How to survive and thrive at work

Here’s a tip. If Bono, the lead singer of U2, ever marches up to you and asks “who’s Elvis round here?” do not point him in the direction of the guy in the corner with the large quiff or the obese chap in finance who constantly munches burgers.


MS Leader: Come clean on housing

Is the future for the UK housing market renting? That’s been the conclusion of a number of recent economic studies into property ownership over the next decade and in Mortgage Strategy’s cover feature this week on page 20, we take an in-depth look into where the market is heading.

Can you put a hat on?

By Sarah Scott, marketing consultant You might think the question in the title is a strange one. Perhaps even more so when you learn that it’s one of several asked as part of an assessment for Employment Support Allowance eligibility in the opening scenes of the 2016 film, ‘I, Daniel Blake’. Daniel is a carpenter […]


News and expert analysis straight to your inbox

Sign up