Valuable commercial banking franchise in Spain, especially in the small and midsize enterprise (SME) segment, led by a focused management team. Ability to successfully reduce legacy nonperforming assets (NPAs). Modest profitability prospects. Inefficient U.K. business and weak profitability, which brings into question Sabadell's expansion in the competitive U.K. market. Our stable outlook on Sabadell balances the challenges posed by its U.K. subsidiary following the migration of its IT platform with the benefits stemming from the continued improvement of its domestic operations' financial profile. Over the next 18-24 months, we expect Sabadell will focus on implementing the restructuring measures of its U.K operations through cost cutting and branch downsizing. However, we anticipate that it will be at least two years before
