CaixaBank S.A.

The stable outlook on CaixaBank balances the potential pressure on its stand-alone creditworthiness over the next 12-24 months, against the benefits that it could derive from the accumulation of bail-inable debt. In particular, the stable outlook incorporates our assumption that CaixaBank will be able to integrate Bankia relatively smoothly, maintaining a RAC ratio above 7.0% over the next two years and a return on equity of about 7%-8%. However, at its current level, CaixaBank's capitalization has limited room to absorb a weaker economy than we currently expect. A change in economic risk in Spain would likely lower our RAC ratio below 7.0% and could cause us to revise down our SACP. In such a scenario, the bank's ALAC buffer could

...Outlook: Stable The stable outlook on CaixaBank balances the potential pressure on its stand-alone creditworthiness over the next 12-24 months, against the benefits that it could derive from the accumulation of bail-inable debt. In particular, the stable outlook incorporates our assumption that CaixaBank will be able to integrate Bankia relatively smoothly, maintaining a RAC ratio above 7.0% over the next two years and a return on equity of about 7%-8%. However, at its current level, CaixaBank's capitalization has limited room to absorb a weaker economy than we currently expect. A change in economic risk in Spain would likely lower our RAC ratio below 7.0% and could cause us to revise down our SACP. In such a scenario, the bank's ALAC buffer could protect senior bondholders in a resolution scenario. That said, despite the stable outlook, if we were to lower the SACP, we would also lower our ratings on the bank's subordinated instruments....

Full Report