Fitch downgrades 18 Spanish banks

Ratings agency Fitch cut another 18 Spanish banks' long-term credit ratings Tuesday.

The cut comes just one day after Fitch downgraded the country's two biggest banks, Santander and BBVA, and one week after cutting Spain's sovereign ratings to BBB from A, Xinhua reported.

Fitch said the actions reflected concerns about the potential for the loan portfolios of certain banks to deteriorate further, especially for those banks whose loan books were heavily exposed to the construction and real estate sectors, and those with low equity bases.

In Fitch's opinion, the weak Spanish economy will continue to affect business volumes which, together with low interest rates, will place pressure on revenues. 

Banks are being challenged to further increase loan impairment coverage levels for real estate assets while complying with stringent capital requirements.  

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