Moody's cuts Spanish banks

Moody's Investors Service said it downgraded the ratings of the three Spanish banking groups owned by the Fund for the Orderly Resolution of the Banking System.

The debt and deposit ratings of Bankia were downgraded by two notches to B1 with a negative outlook. The debt and deposit ratings of the other two banks, Catalunya Banc SA and NCG Banco SA, were both downgraded by two notches to B3 from B1 with a negative outlook.

This concludes the review for downgrade that began on Oct. 24, 2012.

The agency said the downgrades reflect the remaining vulnerabilities of these banks' credit profiles even after receiving extensive public-sector support packages. According to Moody's, this is largely due to their continuing very weak asset quality, weak profitability levels and very challenging restructuring requirements.

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