...Established Franchise, Low Risk Appetite: La Banque Postale's (LBP) ratings reflect its established franchise in deposit collection and housing loans in France, low risk appetite, good asset quality and sound capitalisation, taking into account potential ordinary support from its parent, La Poste (A+/Stable), France's state-owned post office. The bank's modest profitability constrains the ratings. Building Business Diversification: LBP benefits from its historical strong position in regulated savings in France, which enabled it to build a well-positioned housing loans franchise. Further development of the loan book into consumer finance, local authorities financing and corporate lending, combined with the expansion of LBP's insurance and asset- management businesses, is increasing diversification. Profitability Is a Rating Constraint: LBP's profitability is modest compared with similarly rated peers due to LBP's high cost base relating to its service-sharing agreements with La Poste. However,...
