...Im proved Asset Quality, Sound Capitalisation: Caja Rural del Sur, Socidad Cooperativa de Credito's (CRS) ratings reflect the bank's strong capital ratios and loss-absorption capacity, w hich offset its small equity size in absolute terms . Ratings also reflect a moderate risk appetite, improved asset-quality metrics and an adequate funding and liquidity profile. They also factor in the bank's regionally concentrated franchise, large exposure to Spain's sovereign debt, w hich results in counterparty risk concentration and market risk, and modest profitability. Reduction of Problem Assets : In 2018, the speed of reduction of the stock of problem assets accelerated to 25% (from 16% in 2017), leading to a problem-asset ratio of 6.6% at end-2018, w hich includes non-performing loans (NPL ¡ Stage 3 loans) and net foreclosed assets. The ratio is better than the domestic sector average but it still compares unfavourably w ith international standards. Fitch Ratings expects the NPL ratio to decrease...
