RCI Banque 'BBB/A-2' Ratings Affirmed On High Operating Performance Despite Renault Downgrade; Outlook Remains Negative

On Oct. 25, 2019, S&P Global Ratings lowered its long-term issuer credit rating on carmaker Renault S.A. to 'BBB-/A-3' from 'BBB/A-2', with a negative outlook. However, we are affirming our 'BBB' long-term issuer credit rating on RCI Banque (RCI) because we expect the bank to maintain a stable and solid financial profile, and its revenue is less cyclical than its parent. The outlook on RCI remains negative, given uncertainty surrounding Renault group's future strategy and governance, as well as the ultimate financial performance of industrial activities, both of which could have negative contagion effects on RCI, notably regarding funding costs--although to date, operational performance and the bank's market access remain strong. A further downgrade of Renault would not automatically entail

...October 28, 2019 - On Oct. 25, 2019, S&P Global Ratings lowered its long-term issuer credit rating on carmaker Renault S.A. to '###-/A-3' from '###/A-2', with a negative outlook. - However, we are affirming our '###' long-term issuer credit rating on RCI Banque (RCI) because we expect the bank to maintain a stable and solid financial profile, and its revenue is less cyclical than its parent. - The outlook on RCI remains negative, given uncertainty surrounding Renault group's future strategy and governance, as well as the ultimate financial performance of industrial activities, both of which could have negative contagion effects on RCI, notably regarding funding costs--although to date, operational performance and the bank's market access remain strong. - A further downgrade of Renault would not automatically entail a downgrade of RCI, if the bank sustains above-average profitability metrics in the next 18-24 months despite a less favorable auto market, while maintaining its funding costs...

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