Spanish banks downgraded by Moody's

Euro coin and Spanish flag Spain's banks need billions of euros in support

The ratings agency Moody's has cut the credit rating on 28 of Spain's banks, one week after the country asked for money to support them.

The move follows a cut to the Spanish government's own credit rating to just above junk status earlier this month.

Moody's said in a statement, that Spain's reduced creditworthiness "implies a weaker credit profile for Spanish banks."

Among the downgrades was a cut to Banco Santander.

Its long-term rating was cut to Baa2 from A3 and that rating is itself under review for a possible further downgrade.

But Moody's kept Santander one notch above the sovereign rating of Baa3, the Moody's release noted, because of the bank's geographic diversity and what it sees as its manageable exposure to Spanish sovereign debt.

Santander's UK arm is a standalone business and depositors' money is protected by the Financial Services Compensation Scheme in the UK.

Banco Bilbao Vizcaya Agentaria was also among those whose ratings were cut.

A cut in an organisation's credit rating theoretically makes it more expensive for it to borrow money.

Earlier on Monday Spain formally asked for money to help support its banks after an independent audit of Spain's banks last week found that they will need up to 62bn euros (£50bn) in extra funding.

European authorities had already agreed to provide up to 100bn euros ahead of assessments of the banks' needs.

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