The Spanish banks Santander and BBVA are facing an investor downgrade after Barclays released a negative note on both.
FT Alphaville reports that this downgrade was largely because of the difficult state of the Spanish economy, but it is also a lack of loan loss provisions that is putting the banks in danger.
BBVA’s reserves will run their course at some point in 2010, and Santander’s not long behind that, sometime in 2011, according to FT Alphaville.
Santander has a significant presence in the United States having bough Sovereign Bank in 2008 and BBVA is building a presence in America’s Sunbelt. Their shares have responded negatively to today’s news.
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