Ratings agency Standard & Poor’s has cut the rating of 15 of Spain’s banks, including the two largest Santander and BBVA.
That comes after Friday’s downgrade of the country’s sovereign debt rating to almost junk level with a negative outlook, and as investors wait for Madrid to request a bailout.
The bursting of the property bubble and a prolonged recession mean Spain’s banks face a capital shortfall of 59.3 billion euros according to a recent independent audit.
S&P said it expected to conclude its review of the wider implications of the sovereign downgrade on the banks’ ratings in November.
Madrid has been offered a credit line of up to 100 billion euros to help recapitalise its banks, though has said it will only need around 40 billion euros of that.