...Asset Quality Drives Ratings: Caixa Econ=mica Montepio Geral, caixa economica bancaria, S.A.'s (CEMG) ratings reflect remedial actions taken to restore the bank's capital ratios and actions to accelerate the implementation of CEMG's strategic plan. However, CEMG's ratings still reflect low capital buffers in light of the bank's poor asset-quality metrics, weak operating profitability and stable but price-sensitive funding. Restructuring Plan on Track: CEMG completed a capital increase of EUR250 million in June 2017. The bank has also undertaken substantial deleveraging since end-September 2015, reducing its branch network by 23% and staff by 10% to sustain profitability. CEMG was converted to a public liability company in September 2017. This enables the bank to benefit from a change in the treatment of some deferred tax assets (DTAs), which, in turn, will reduce the regulatory capital deduction due to these assets. Still Large Problem Assets: CEMG's non-performing loan (NPL, as per the...
