...Moderate Risk Appetite: The ratings of Banco Cooperativo Espa±ol, S.A. (BCE) reflect its moderate risk appetite, its strategic importance to the members of the Asociacion Espanola de Cajas Rurales (AECR; the Spanish rural cooperatives association), and stable but low profitability due to its low-margin business model. The ratings also incorporate BCE's adequate risk management, sound capital ratios and stable liquidity profile. Support Underpins Strategic Role: The ratings also take into account the set-up of a cross- support mechanism between member entities and BCE to achieve a unified cooperative banking group by pooling strategic goals, common services and IT/risk management systems. The mechanism includes a private guarantee fund to address liquidity or solvency problems within the banking group's member banks, including BCE. Challenging Operating Environment: Spain's deteriorating economic environment poses challenges to the bank's financial profile and the prospects of the members...
