...VR Upgrades, Outlook Revisions: Between June and August 2014 Fitch Ratings upgraded the Viability Rating (VR), which is the expression of a bank's standalone creditworthiness, of four of the six rated medium-sized Spanish banks; an Outlook was revised to Positive and a Rating Watch Negative was removed. The rating actions mostly resulted from improvements in capital, notably in state-aided banks, asset quality stabilisation signals and good progress in restructuring processes. In addition, the operating environment improved and Spain's sovereign rating was upgraded to `BBB+'/Stable in April. However, the banks remain challenged to reduce large stocks of problem assets, improve banking earnings and build up further loss absorption buffers in view of EU regulation. Capital Boosted: Asset de-risking and lower capital deductions for deferred tax assets after an amendment to corporate tax legislation contributed to banks' improved capitalisation. State- aided banks completed the burden sharing...
