Research Update: Banco De Sabadell Outlook Revised To Positive On Buildup Of Subordinated Bail-In-Able Debt Buffer; 'BBB-/A-3' Affirmed

Banco De Sabadell (Sabadell) is making progress in strengthening its additional loss-absorbing capacity (ALAC) buffers, which will provide protection to senior creditors in a resolution scenario. Meanwhile, Sabadell is entering the second year of its restructuring plan, gradually improving its profitability and domestic competitive position, although significant progress will only come after 2023. We revised our outlook on Sabadell to positive from stable and affirmed our 'BBB-/A-3' issuer credit ratings on the bank. We also affirmed our 'BBB/A-2' long- and short-term resolution counterparty ratings on Sabadell, as well as all the issue ratings on the bank's debt. The positive outlook reflects the possibility of an upgrade over the next 12-24 months if Sabadell delivers on its issuance plan, increasing the

...- Banco De Sabadell (Sabadell) is making progress in strengthening its additional loss-absorbing capacity (ALAC) buffers, which will provide protection to senior creditors in a resolution scenario. - Meanwhile, Sabadell is entering the second year of its restructuring plan, gradually improving its profitability and domestic competitive position, although significant progress will only come after 2023. - We revised our outlook on Sabadell to positive from stable and affirmed our '###-/A-3' issuer credit ratings on the bank. - We also affirmed our '###/A-2' long- and short-term resolution counterparty ratings on Sabadell, as well as all the issue ratings on the bank's debt. - The positive outlook reflects the possibility of an upgrade over the next 12-24 months if Sabadell delivers on its issuance plan, increasing the size of its subordinated bail-in-able buffer, and provides clear line of sight that its ALAC buffer will remain sustainably above 350 basis points (bps)....

Research Update