S&P Downgrades 15 Spanish Banks

Standard & Poor's lowered the credit rating of 15 Spanish banks, following its downgrade of the nation's sovereign long-term debt last month.

The ratings agency on Monday lowered the ratings of 10 banks, including the two largest by assets, Santander and Banco Bilbao Vizcaya Argentaria SA (BBVA), each of which fell one notch. Bankia S.A., CaixaBank S.A. and Caja de Ahorros y Pensiones de Barcelona were among other Spanish banks also lowered.

"We expect Spanish banks' profitability to remain below the historical average over the medium term, owing to high credit provisions," S&P said in a statement.

Downgrading banks in near-tandem with a nation is common practice, based on S&P's assumption of state support for banks. The ratings company lowered Spain's long-term debt rating to A from AA- on Jan. 13.

Santader, which is also the Eurozone's largest bank by market capitalization, was lowered to A+ from AA-, while BBVA was reduced to A from A+.

S&P's Spanish bank downgrade followed Fitch Ratings' lowering of four major Spanish banks on Monday for the same reason.

"Fitch believes there is a close link between bank and sovereign credit risk (and therefore ratings) and, it is unusual for banks to be rated above their domestic sovereigns," Fitch said in a statement.