Grupo Cooperativo Cajamar

The stable outlook indicates that at the current level, the ratings have room to absorb the likely deterioration that we expect to see in GCC's credit metrics amid the difficult economic environment in the next 12-18 months. We expect nonperforming assets to increase to 12.5% by end-2022. We anticipate that the group will avoid posting losses, but the combination of higher provisions and earnings pressure, together with a still-large cost base, will lead to modest bottom-line results. Despite profitability pressures, we expect GCC to preserve a resilient business model in its core region, as well as its funding advantage. Capital could decline somewhat, standing closer to the lower threshold of our adequate capital assessment. Furthermore, higher economic risks in Spain

...The ratings on Banco de Credito Social Cooperativo S.A. (BCC) and Cajamar Caja Rural S.C.C. (Cajamar), both core members of Grupo Cooperativo Cajamar (GCC), balance the group's comparatively high stock of problematic assets, geographically concentrated business, and limited profitability, with GCC's resilient cooperative franchise in its core regions, adequate capitalization, and predominantly retail funding profile. GCC is the largest cooperative banking group in Spain. It operates through a network of 18 credit cooperatives, of which Cajamar is the largest (accounting for about 86.5% of the business). BCC is the group's central body and acts as its central bank, providing financial and credit services to the credit cooperatives. It is 92% owned by all of the cooperatives. GCC has a traditional banking profile and serves companies and individuals. It is prudently managed. Loans to small and midsize enterprises (SMEs), agribusiness, and corporates represented 46% of the group's lending...

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