...Integration Under Way: Unicaja Banco S.A.'s ratings reflect its strong regional franchise, the good progress in integrating and turning around Banco CEISS, a weaker bank acquired in 2014, and adequate funding and sound liquidity. The ratings also factor in the bank's weak, although improving asset quality and just acceptable capitalisation, which remains at risk from unreserved problem assets. Improving Asset Quality: The ratio of problem assets (non-performing loans (NPLs) and foreclosures) remained high at 13.2% at end-June 2016. Unicaja's NPLs declined by 26% in 2015 and a further 6% in 1H16 thanks to recoveries and write-offs. The stock of foreclosed assets is also decreasing, as a result of increased property sales. Fitch Ratings expects this improvement in asset quality to continue, helped by the improving economic environment in Spain. The bank's reserve coverage for problem assets is solid and above the sector average. Just Acceptable Capitalisation: Capitalisation has been improving...
