Santander UK downgraded

The credit ratings agency Moody's has downgraded 16 Spanish banks including Santander UK. It is the first British high street bank to be downgraded this year since the Euro crisis. The firm insists this has no impact on its UK business.

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Santander UK: 'Moody’s credit rating has no impact on our businesses in Britain'

The change to Moody’s credit rating of Santander UK plc has no impact on our businesses in the UK or our plans for future growth. Santander UK plc is an autonomous subsidiary of the Santander Group, with more than c. 90 percent of its total assets held in the UK and a Eurozone sovereign exposure of less than 1% of assets. Santander UK plc is regulated in the UK by the Financial Services Authority (‘FSA’) and relevant deposits are protected by the Financial Services Compensation Scheme (‘FSCS’).

– Santander UK

Santander UK had reassured that it was autonomous from parent company

Santander UK has become the first British high street bank to have its credit rating downgraded because of the recent trouble in the eurozone. This comes despite their reassurances on Tuesday:

Santander operates under a subsidiary model.

This means that Santander UK plc is completely autonomous from its Spanish parent company.

This structure acts as a firewall to prevent problems within one part of the group spreading to other units in the event of financial difficulties

– Santander UK spokesman, Speaking on May 15

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Bankia chairman: 'Investors can be reassured about savings'

Bankia shares tumbled today sparking investor fears
Bankia shares tumbled today sparking investor fears Credit: Reuters/Andrea Comas

The chairman of troubled Spanish bank Bankia has reassured investors today about the "safety of their savings", according to El Mundo newspaper.

Jose Ignacio Goirigolzarri said in a statement to the National Securities Market Commission: "Depositors at Bankia can be absolutely reassured that their savings are safe" and that the bank's activity had been "within normal parameters".

Spanish government official: 'No deposit flight at Bankia'

Spain's Economic Secretary has said that there had not been an exit of deposit funds from troubled bank Bankia, according to Reuters.

Economic Secretary Fernando Jimenez Latorre said: "It's not true that there is an exit of deposits at this moment from Bankia".

El Mundo newspaper had reported earlier that Bankia had lost over 1 billion euros in deposits, around 1% of retail and corporate accounts, over the past week.

Nationalised Spanish bank triggers investor fears

Shares in Bankia, Spain's fourth largest bank have tumbled as much as 26% today, El Mundo newspaper has reported. This follows a report that customers withdrew more than 1 billion euros from their accounts since the country's government took over the bank last week.

The newspaper reported that the newly appointed chairman, Jose Ignacio Goirigolzarri, informed a board meeting that customers had pulled out funds since the bank was taken over by the government.

Uncertainty over the final cost of Spain's banking reform has stoked investor fears that an expensive international bail-out could be on the cards, putting the survival of the euro zone at stake.

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