...VR Drives IDRs: Caja Rural del Sur, Sociedad Cooperativa de Credito's (CRS) IDR reflects its standalone credit profile, as expressed by its Viability Rating (VR). The VR is driven by the bank's improved but still weak asset quality, partly influenced by the weaker Andalusian economy. It also factors in its enhanced loss absorption buffers, and sound funding and liquidity profile. Asset Quality Improving: CRS's non-performing loans (NPL) ratio remained high at 9.8% at end-1H15 (12.8% including foreclosed assets) but is better than the sector average. Loan impairment reserve coverage remained broadly stable and ample at 73%. However, CRS remains somewhat exposed to legacy real estate development problem assets, mostly in the form of foreclosures, which accounted for 7% of gross loans and foreclosed assets at end- 1H15. Robust Capitalisation: CRS's capitalisation is robust, with a Fitch Core Capital (FCC) ratio of 19%. Better asset quality and enhanced NPL coverage reduced the FCC to unreserved...
