"According to public information on their current capital positions, we estimate that a maximum of 11 savings banks will require additional capital to meet new (capital) requirements of either 8.0 percent or 10 percent core capital," it said in a statement.

The government on Friday approved measures that oblige banks to increase their core capital ratio to 8.0 percent and which could force many unlisted institutions to convert into traditional listed banks, so as to ensure they have a bigger cushion against economic difficulties.

The core capital ratio would be raised to at least 10 percent for unlisted banks or those which have private investment of less than 20 percent and who depend on the wholesale markets for more than 20 percent of their funding.

"Higher minimum core capital requirements will accelerate the savings banks' conversion into commercial banks and their listing afterwards," S&P said.

"Pressure to strengthen capital quickly will likely also lead to further consolidation, possibly including domestic and foreign commercial banks.

"Given the timing of the process, we also believe that some institutions could fail to raise the necessary capital, which could lead to government ownership of a portion of the financial sector."

The savings banks are weighed down by loans that turned sour after the collapse of a housing bubble in 2008 and are at the heart of fears the country could need a much bigger rescue than those granted by the EU and International Monetary Fund to Ireland and Greece last year.

Under pressure from the government, many of them merged last year, reducing their numbers from 45 to 17, to improve their efficiency.

The government has said that those banks who fail to recapitalise in time will be nationalised for a period of not more than five years.

S&P said on Tuesday it expected another difficult year for Spanish banks in 2011 and accordingly downgraded several ratings, including the biggest savings bank La Caixa which is being restructured into a retail lender.