...Asset Quality Drives Ratings: Banco Comercial Portugues, S.A.'s (BCP) ratings are driven by its weak, albeit improving, asset quality that puts pressure on its operating profitability and internal capital generation. The ratings also factor in the bank's vulnerable capitalisation and its stable funding profile. Positive Outlook: The Positive Outlook reflects Fitch Ratings' expectations that BCP will continue to reduce its problem assets (non-performing loans (NPLs) and foreclosed assets) in the next 18-24 months, which should gradually lower impairment charges and result in a meaningful improvement of internal capital generation. The improved economic environment in Portugal should help the bank execute its problem asset reduction plan. Progress in Reducing Problem Assets: BCP's asset-quality indicators remain weak, reflecting its sizeable stock of problem assets, although the bank has made good progress in reducing it. At end-March 2018, its NPL ratio (as per European Banking Authority...
