UBS predicts Spanish bank woes

Spanish banks are still to feel the full impact of the financial crisis, UBS said yesterday, warning that asset deterioration would hit the country&rsquo;s lenders hard.<br /><br />&ldquo;We expect earnings for Spanish banks to fall by 15 per cent this year and 25 per cent next year and to only start to recover in 2012,&rdquo; UBS said in a research note.<br /><br />The bank&rsquo;s economists pointed to Spain&rsquo;s worsening economy and said they saw &ldquo;little reason for optimism&rdquo;, forecasting that unemployment would top 20 per cent by 2010.