Banque et Caisse d'Epargne de l'Etat, Luxembourg

S&P Global Ratings' stable outlook on BCEE mirrors that on Luxembourg (AAA/Stable/A-1+). This reflects BCEE's status as a GRE and our expectation that the bank will keep its integral link with, and very important role for, Luxembourg's government over our rating horizon. We would lower the long-term rating on BCEE to 'AA' if we lowered the long-term rating on Luxembourg to 'AA+'. We might also consider a negative rating action if the relationship between BCEE and Luxembourg were to change, for example if state ownership reduced substantially, or if the bank's poor performance revealed distant and passive monitoring from its owner. Everything else being equal, if we revised downward our assessment of BCEE's group SACP, even by several notches, it

...The Banque et Caisse d'Epargne de l'Etat, Luxembourg (BCEE) has a leading domestic retail franchise heavily focused on Luxembourg. With total assets of 53.2 billion as of mid-year 2021, BCEE is a rather small bank by international standards but ranks among the top-three banks in Luxembourg. Its dominant home market position, particularly among households, is one of the bank's key business strengths. This is reflected in a strong market share of individual deposits and mortgage loans segment (around 40%-50% of the market total). The dynamism of the domestic housing market should persist over the long term, and should continue to provide business opportunities to BCEE, due to favorable demographics in the Grand Duchy. Substantial efforts in improving its digital offer in recent years have supported BCEE's customer-centric strategy, and we believe the digitalization process will continue as customer demand for flexible contact channels is increasing. BCEE has a long-standing track-record and...

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