Dexia Credit Local S.A.

2020 and 2019 were both marked by major steps in its resolution plan, including the sale of DKD and Dexia Israel, the closure of DCL's branches in Madrid and Lisbon, as well as the transformation of its New York branch into a representative office. 2021 has also been characterized by another successful step, with DCL taking over €4.2 billion in assets from its Italian subsidiary Crediop in June 2021, reducing the size of its subsidiary to €11.2 billion and leaving it in better shape with improved capitalization and lower funding needs. We understand that DCL is now exploring further options, to either scale down Crediop's remaining business or sell the entity. At present, we continue to believe that Crediop would

...Our ratings on Dexia Credit Local (DCL) rely on a consolidated analysis of the Dexia group (Dexia). Our analysis also incorporates our view of DCL's core status within Dexia, for which it is the main bank. DCL accounts for 99% of Dexia group's total assets at June 2021. Dexia has shown proactive management in its wind-down process, with continued reduction of its balance sheet even during the COVID-19 crisis. Dexia has shown significant progress in reducing its balance sheet since it entered in an orderly resolution in 2012. It reduced its balance sheet by 71%--from 413 billion in 2011 to 120 billion in 2019. Despite the difficult market conditions, Dexia reduced it by a further 5% in 2020, reaching total assets of 114 billion at year-end and by 10% in the first half of 2021, resulting from higher interest rates and portfolio reduction, reaching total assets of 103 billion. Over the past four years, total assets fell by 98 billion, mostly resulting from deleveraging actions (35 billion)...

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