Large franchise in Galicia, which provides a large and stable retail funding base. Better-than-peers' asset quality metrics. Improving capitalization on the back of hybrids issuance, increased earnings retention, and capital gains on noncore asset disposals. Regional geographic concentration. Weak--although improving--operating profitability and efficiency. Large deferred tax asset (DTA) stock. The stable outlook reflects our view that Spain-based Abanca's creditworthiness is unlikely to change in the next 12-18 months. We currently expect that Abanca's risk-adjusted capital (RAC) ratio will remain at the lower end of the adequate range (7%-10%) this year and the next. An easing of economic risks in Spain would add about 70 basis points (bps) to our RAC forecasts, but this would not be enough for us to
