In recent quarters, Sabadell has continued to reduce its stock of problematic assets in Spain and enhance its capitalization. That said, the problems experienced with the IT platform migration of its U.K.-based subsidiary TSB have significantly damaged Sabadell's reputation in the U.K. and will, in our view, heighten the difficulties it faces in achieving its business and financial targets in the country. We are affirming the long- and short-term issuer credit ratings on Banco de Sabadell at 'BBB/A-2'. The stable outlook reflects our expectation that the bank will remain adequately capitalized for the risks it faces--benefiting from improving economic conditions in Spain--and will be able to absorb the financial and reputational effect on its U.K. franchise. On June 28, 2018,
