Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Bolsa de Madrid  >  Bankia SA    BKIA   ES0113307039

SummaryNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Moody's downgrades 16 Spanish banks

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/18/2012 | 10:43am CET

Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.

All the banks' long-term debt ratings were downgraded by at least one notch, and some suffered three-notch cuts.

Spain's banks, awash in bad loans after a real estate boom went bust, are at the heart of the euro zone debt crisis because markets fear a state bailout would put a severe strain on the country's already stretched public finances.

Spain relapsed into an economic recession in the first quarter and likely faces a prolonged slump as the government tries to shrink its budget deficit by slashing spending.

"Amidst the ongoing euro area debt crisis, the Spanish government's rising budget deficit and the renewed recession, sovereign creditworthiness has declined," the ratings agency said. "This decline is a driver of today's bank rating actions."

Moody's had cut Spain's sovereign rating by two notches to A3 in February, placing it in the middle of its investment grade rating scale. It maintains a negative outlook on the credit.

Thursday's move came after Moody's downgraded 26 Italian banks on Monday and followed a press report about a run at troubled lender Bankia, Spain's fourth largest bank. The Spanish government, which took over Bankia last week, denied the report.

Santander suffered a three-notch cut to its long-term rating to A3 from Aa3.

Moody's also cut BBVA's long-term rating by three notches to A3 from Aa3 and put the credit on a negative outlook. BBVA is Spain's second largest lender.

BAD LOANS, LIMITED ACCESS TO FUNDING

Moody's said on April 13 it would begin issuing conclusions to various reviews for European banks and global financial securities firms, including big U.S. investment banks. This process was to begin in mid-May and conclude by the end of June.

The agency cited restricted bank access to funding and rapid deterioration of asset quality for all the downgrades.

Spain's banks have 307 billion euros ($391.15 billion) of exposure to a property market that crashed in 2007-2008, of which 184 billion euros is considered problematic, according to government estimates.

Four separate government reforms of the financial sector have failed to persuade investors that the banking system is safe, even though banks have set aside enough funds to absorb losses in up to 45 percent of their total exposure, including performing and non-performing loans and real estate holdings.

Caixabank's long-term rating was cut by three notches to A3. Moody's cited the bank's having reported a 32 percent increase in problem loans at the end of 2011.

The ratings agency cut Bankinter's long-term rating by three notches to Baa2, two notches above junk status. It cited the bank's heavy dependence on wholesale funding and restricted access to market funding.

Rival ratings agency Standard & Poor's took negative ratings action on 16 Spanish banks in April, days after it downgraded Spain's sovereign credit rating by two notches to BBB-plus.

Fitch Ratings has Spain's sovereign credit rating at A, about the mid-point of its investment grade scale.

The government's borrowing costs shot higher on Thursday after data confirmed the economy was back in recession.

Prime Minister Mariano Rajoy said Wednesday his government, which is struggling to reduce the budget deficit, could soon have trouble financing itself in the bond market unless the pressure eases.

The government's strained finances are another risk for banks, since many have used cheap loans from the European Central Bank to buy three-year and five-year government bonds.

Through March, Spanish banks held almost 150 billion euros of Spanish government bonds, up from about 76 billion at the end of November.

AFFECT ON U.S. BANKS

U.S. bank stocks are likely to face pressure because of investor concerns about their exposure to Spain, analysts said.

But because the Spanish bank downgrades were expected and because U.S. banks had ample time to reduce or hedge exposure, the financial impact is likely to be limited.

"The downgrades have been pretty well telegraphed but I don't think that means U.S. bank stocks won't sell off," said Keith Davis, an analyst with Farr, Miller & Washington. "There's a knee jerk reaction; when things go wrong people sell first and ask questions later."

(Reporting by Steven C. Johnson; Additional reporting by Luciana Lopez, Daniel Wilchins and Steven C. Johnson in New York and Sonya Dowsett and Fiona Ortiz in Madrid; Editing by Leslie Adler)

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on BANKIA SA
02/13 BANKIA : Ex-Bank of Spain head faces probe on Bankia IPO, three officials resign
02/08 GOIRIGOLZARRI : “Digitalisation is a structural shift for the financial se..
01/30 BANKIA : launches express procedure in its branches to deal with floor clause re..
01/30DJEUROPEAN MORNING BRIEFING : Corporate Events
01/23 BANKIA : attracted 172,293 salaries in 2016 after eliminating its fees
01/17 BANKIA : launches the “No Fees Mortgage”
01/17 BANKIA : and EIB sign agreement to lend an aggregate of €500 million to SMEs and..
01/17 BANKIA : In the year to November, Bankia’s support for companies’ fo..
01/10 BANKIA : 300,000 Bankia digital customers now have an online personal advisor
01/10 BANKIA : launches professional training and certification plan for 5,500 employe..
More news
Sector news : Banks - NEC
06:11aDJHONG LEONG BANK BHD : 2Q Net Rises 60%
06:08aDJHANG SENG BANK : 2016 Net Profit Down 41% at HK$16.21 Billion
02:35aDJUNITED OVERSEAS BANK : Plan to Issue S$750 Million 3.50% Notes Due 2029
02/20 Vale to scrap controlling bloc, merge shares in major governance move
02/20 FTSE steadies after setting one-month high, Unilever slumps
More sector news : Banks - NEC
Advertisement
Financials (€)
Sales 2017 3 077 M
EBIT 2017 1 445 M
Net income 2017 852 M
Debt 2017 -
Yield 2017 3,33%
P/E ratio 2017 12,62
P/E ratio 2018 12,45
Capi. / Sales 2017 3,57x
Capi. / Sales 2018 3,56x
Capitalization 10 988 M
More Financials
Income Statement Evolution
More Financials
Consensus 
Mean consensus HOLD
Number of Analysts 25
Average target price 0,91 €
Spread / Average Target -4,2%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
José Sevilla Álvarez Chief Executive Officer & Executive Director
José Ignacio Goirigolzarri Tellaeche Executive Chairman
Leopoldo Alvear Trenor Chief Financial Officer
Antonio Ortega Parra Executive Director, GM-People & Resources
Jorge Cosmen Menéndez-Castañedo Independent Non-Executive Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
BANKIA SA11 661
JPMORGAN CHASE & CO.4.57%322 867
WELLS FARGO & CO5.41%291 746
BANK OF AMERICA CORP10.95%246 490
INDUSTRIAL AND COMMRCL..5.22%238 757
CHINA CONSTRUCTION BAN..7.72%204 590
More Results