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The Spanish bank, Santander has had its credit rating downgraded today by the ratings agency Standard and Poors. The bank was one of eleven to be downgraded; just a week after Spain itself had its credit rating lowered to BBB+.

The lowering of Spain’s credit rating was in response to the country’s financial turmoil. This wasn’t helped at all by the news today that Spain has headed back into recession, just like the UK. Spain’s economy shrank by 0.3% for 2 consecutive quarters.

The move to downgrade 11 banks is because the banks own a lot of Spain’s debt which is now less secure. The UK section of Santander wasn’t hit with a full downgrade due to its wealth being tide more closely to the healthier UK economy.

The ratings agency Standard and Poor said: ‘The factors behind the downgrade of Spain could have potentially negative implications for our view of the economic risk and industry risk affecting the Spanish banking industry and for our analysis of specific rating factors that drive our stand-alone credit profile assessments on Spanish banks.’

Louise Cooper, a BGC Partners market analyst said: ‘Although the figure is not quite as bad as the forecast of a 0.4 per cent fall, do not get carried away with optimism – I believe that Spain is close to imploding under austerity and a property bust.’

Santander has 26.7 million customers in the UK. The Spanish bank reported a drop in profits of 25% last week.