The ratings agency cited adverse operating conditions, characterised by the renewed recession, the ongoing real estate crisis and persistent high levels of unemployment.
It also said that due to borrowing difficulties the Spanish government has had its ability to provide support to the banks “reduced”.
The Spanish government also had to pay higher rates of interest to borrow money on the markets which leads some to believe it may need a bailout.
A spokesman from Santander said that the change to Moody’s credit rating of Santander UK had no impact on its business in the UK or its plans for future growth.
He said: “Santander UK is an autonomous subsidiary of the Santander Group with more than 90% of its total assets held in the UK and a eurozone sovereign exposure of less than 1% of assets.”
