CaixaBank S.A.

Powerful retail banking franchise in Spain. Lower credit risk profile than the Spanish banking system average. Balanced funding structure and limited reliance on wholesale funding. Geographic concentration in Spain and Portugal. More vulnerable than most other domestic peers due to increased political risks in Catalonia Still modest profitability. Sizable exposure to market risk through its equity portfolio. S&P Global Ratings' positive outlook on Spain-based CaixaBank reflects the possibility of an upgrade in the next 12-24 months if Spain's economic and operating environment becomes more supportive, ultimately resulting in a strengthening of banks' creditworthiness and therefore a higher anchor for Spanish banks. The positive outlook also assumes that CaixaBank will continue gradually strengthening its profitability and capital while reducing its stock

...Outlook: Positive S&P Global Ratings' positive outlook on Spain-based CaixaBank reflects the possibility of an upgrade in the next 12-24 months if Spain's economic and operating environment becomes more supportive, ultimately resulting in a strengthening of banks' creditworthiness and therefore a higher anchor for Spanish banks. The positive outlook also assumes that CaixaBank will continue gradually strengthening its profitability and capital while reducing its stock of problematic assets and maintaining a balanced funding profile and comfortable liquidity. Despite the uncertainty generated by increasing political risks in Catalonia and the associated social unrest, our base-case scenario is that Catalonia will remain part of Spain and that the bank will be able to manage the related challenges ahead. We could revise the outlook back to stable if we do not see economic prospects or the operating environment in Spain becoming more supportive for banks, or if other risks offset the potential...

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