S&P might drop Portuguese banks

Standard & Poor's said it put the long-term and short-term counterparty credit ratings of the following Portuguese banks on CreditWatch with negative implications: Caixa Geral de Depositos SA; Banco Comercial Portugues SA; Banco Espirito Santo SA and core subsidiary Banco Espirito Santo de Investmento SA; Banco BPI SA and core subsidiary Banco Portugues de Investimento SA; and Banco Santander Totta SA.

S&P said the actions follow the CreditWatch placement on Portugal.

In the agency's opinion, the factors that could potentially lead it to downgrade Portugal could also have negative implications for its view of the creditworthiness of the banking industry in general and of individual banks.

S&P said it believes that there are rising risks to Portugal's ambitious fiscal consolidation objectives and an increased likelihood of noncompliance with the current EU/IMF program.

Risks include further challenges to fiscal and reform measures by Portugal's Constitutional Court, weaker-than-expected economic performance and a resurgence of political tension, leading to delays in 2014 budget or program reviews, the agency noted.

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