Abanca Corporacion Bancaria S.A

The positive outlook indicates that we could raise our long- and short-term ratings on Abanca by one notch within the next 18-24 months. We could raise the ratings if: Our view of industry risk in the Spanish banking industry improves, prompting us to revise up the anchor for banks operating primarily in Spain; and Abanca's performance improves further, reaching levels closer to those of higher-rated peers without an excessive increase in risk appetite. We could also raise our ratings on Abanca if its capitalization were to strengthen such that its RAC ratio consolidates sustainably above 10%. We could revise the outlook to stable if we reassessed to stable, from positive currently, the trend on industry risk for the Spanish banking

...S&P Global Ratings expects Abanca's capitalization will continue strengthening on the back of improved earnings capacity over the next 18-24 months. The bank's operating returns are likely to expand further thanks to rising revenues and improved efficiency. Moreover, we now consider a majority of Abanca's earnings to be recurring and sustainable, and sufficient to support its organic capital generation. In 2023, Abanca posted a recurrent return on equity (ROE) of 10.6% and a cost-to-income ratio of 54.6%. Furthermore, recent acquisitions offer the possibility of additional cost optimization and efficiency gains. As such, we anticipate that its risk-adjusted capital (RAC) could exceed 10% over the coming 18-24 months....

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