Ratings agency Standard & Poor has cut the ratings of five Spanish banks, including troubled Bankia which announced it would need 19 billion Euros to refinance its debt. It's another blow to the country's ailing banking sector as the nation’s deteriorating finances rattle global investors.
S&P lowered its rating on Banco Popular, Bank-inter and Bankia to "double B-plus" from "triple B-minus." They also cut the ratings of two other banks. However, it left unchanged the ratings on two of the biggest banks. These come about a week after Moody's sweeping downgrade of Spain's banks, pointing to the government's weakened ability to support lenders.
Spain's banks are now 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. Last month, S&P cut its credit rating on Spain by two notches, citing expectations government finances will worsen even more than previously thought.