...Sound Capitalisation: Caja Rural del Sur, Sociedad Cooperativa de Credito's (CRS) ratings reflect the bank's moderate risk appetite, sound loss-absorption capacity as well as funding and liquidity. They also factor in the bank's regionally concentrated franchise and improving, although still weak, asset quality. Other factors taken into account include the bank's risk concentration from its large exposure to Spain's sovereign debt, modest profitability and small equity size in absolute terms. Good but Concentrated Regional Franchise: CRS is a credit cooperative and offers retail banking services to households and SMEs, primarily concentrated in provinces within the Autonomous Community of Andalusia (BBB-/Stable) in southern Spain. The bank benefits from significant market shares in this region but its national market share is small, at below 1%. Improving Asset Quality: CRS has made progress in reducing problem assets in 2017 (by 16% yoy). However, the bank's problem asset ratio, which...
