Ratings agency Standard & Poor's cut the ratings on five Spanish banks on Friday,another blow to the country's ailing banking sector as the nation's deteriorating finances rattle global investors. But S&P left unchanged its ratings on the country's two biggest banks,Santander (SAN.MC) and Banco Bilbao Vizcaya Argentaria. The Standard & Poor's ratings actions come about a week after Moody's Investors Service carried out a sweeping downgrade of Spain's banks,pointing to the government's weakened ability to support lenders. S&P lowered its rating on Banco Popular (POP.MC),Bankinter (BKT.MC) and Bankia (BKIA.MC) to 'BB-plus' from 'BBB-minus' and cut the ratings of two other banks,Banca Civica and Banco Financiero de Ahorros. BFA is Bankia's parent company. The cuts to BB-plus take those banks into junk territory,underscoring risks to the country's financial sector. Last month S&P cut its credit rating on Spain by two notches,citing expectations the government finances will worsen even more than previously thought. Spain's banks,awash in bad loans after a real estate boom went bust,are 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. Spain relapsed into an economic recession in the first quarter and likely faces a prolonged slump as the government tries to shrink its budget deficit by slashing spending.
