... Bancaria, S.A.'s (Abanca) Long-Term Issuer Default Rating (IDR) is driven by its standalone creditworthiness, as captured by its Viability Rating (VR). The VR was upgraded in April 2015, mainly to factor in improvements in asset quality and capital. However, it reflects the bank's still weak asset quality (despite the recent improvements), modest underlying profitability and still high unreserved impaired assets/capital ratio. The ratings also consider Abanca's adequate funding and liquidity profile. Asset Quality Needs Improvement: The bank's non-performing loans (NPL) ratio improved to 11.2% at end-1H15 from 17% at end-1H14. Including foreclosed assets, the problem assets ratio stood at 12.6%. Fitch Ratings believes this ratio is high despite the bank having transferred most of its real-estate assets to Spain's bad bank (SAREB). Around 45% of NPLs correspond to restructured loans that are performing, and carry impairment reserves. Abanca's...
