Fitch warns on Spanish banks

SPAIN’S banks still need to shrink rapidly and bail in more investors if the sector is to return to health, ratings agency Fitch warned yesterday.

An extra €13bn (£11bn) of capital needs to be generated through bail-ins of subordinated debt and preference share investors, its research found.

And it warned bad loans will continue to plague the sector, particularly hurting profits at those lenders not already in receipt of state aid.

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