...Support-Driven IDRs: The Long-Term Issuer Default Rating (IDR) of NCG Banco, S.A. is at its Support Rating Floor (SRF) based on Fitch Ratings belief of a moderate probability of state support, if needed. The SRF reflects NCG Bancos regional systemic importance to Spain, particularly in the region of Galicia. The Negative Outlook reflects a potential reduction of state support due to the EUs Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism. Improved Standalone Strength: NCG Bancos Viability Rating (VR) reflects progress made in the implementation of its restructuring plan and capital improvements following balance sheet restructuring and deleveraging. However, the VR remains negatively affected by weak asset quality and core earnings. NCG Bancos VR also captures adequate funding and liquidity. Weak Asset Quality: NCG Bancos impaired loans ratio was high, although it improved to 17% at end-1H14 from 18% at end-2013. The decrease, achieved despite continued...
