...Asset Quality Drives Ratings: Banco Comercial Portugues, S.A.'s (BCP) ratings primarily reflect the bank's improved asset quality, although it remains weaker than higher-rated domestic peers and international averages. They also reflect Fitch Ratings' view that capitalisation remains vulnerable to severe asset quality shocks, despite significant improvements since 2016. These relative rating weaknesses are mitigated by BCP's resilient pre-impairment profitability thanks to a leading franchise in Portugal and sound cost-efficiency. Improved Asset Quality: BCP's asset quality improved in 9M21, despite difficult economic conditions. The impaired loans ratio decreased to slightly below 5% at end-September 2021, in line with the domestic average, owing to active management of legacy impaired loans, notably through sales and write-offs. The extensive use of loan moratoriums (17% of Portuguese loan portfolio), which mainly expired at end-September 2021, has to date prevented abrupt asset quality...
