French banking group Credit Agricole is building up capital and maintaining a low cost of risk following the de-risking strategy undertaken in prior years. Its coverage of impaired assets is higher than that of peers. Despite the negative-interest-rate environment, we think the group could continue to deliver sound internal capital generation--leveraging its leading and increasingly diversified business franchise and limited distributions to shareholders--and maintain a contained, well-diversified risk profile. We are therefore revising to positive from stable our outlook on the long-term ratings on Credit Agricole's core entities and affirming the ratings. The positive outlook indicates that we may raise the long-term ratings in the next two years if we see a further strengthening of the group's capitalization, combined with
