Spain-Based Abanca Corporacion Bancaria Upgraded To 'BB+/B' On Improving Capitalization; Outlook Stable

We consider that Abanca's capitalization is strengthening on the back of a hybrids issuance, increased earnings retention, and some sizable capital gains on noncore asset disposals. We now expect that Abanca's risk-adjusted capital ratio will increase to levels sustainably above 7% from 2018 onward, and its asset quality will remain sound when compared to its domestic peers. We are therefore raising our long-term issuer credit rating on Abanca to 'BB+' from 'BB' and affirming our 'B' short-term issuer credit rating. The stable outlook reflects our view that in the coming 12-18 months, even if Abanca's returns improve, further aided by the more supportive economic environment, its limited underlying profitability versus peers will continue to constrain its ratings. MADRID (S&P Global

...+ We consider that Abanca's capitalization is strengthening on the back of a hybrids issuance, increased earnings retention, and some sizable capital gains on noncore asset disposals. + We now expect that Abanca's risk-adjusted capital ratio will increase to levels sustainably above 7% from 2018 onward, and its asset quality will remain sound when compared to its domestic peers. + We are therefore raising our long-term issuer credit rating on Abanca to '##+' from '##' and affirming our 'B' short-term issuer credit rating. + The stable outlook reflects our view that in the coming 12-18 months, even if Abanca's returns improve, further aided by the more supportive economic environment, its limited underlying profitability versus peers will continue to constrain its ratings. MADRID (S&P Global Ratings) Oct. 2, 2018--S&P Global Ratings said today that it raised its long-term issuer credit rating on Spain-based Abanca Corporacion Bancaria S.A. to '##+' from '##' and affirmed the 'B' short-term...

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