Spain-Based Banco de Sabadell 'BBB/A-2' Ratings Affirmed; Outlook Stable

The IT migration of TSB's systems in April led to significant customer service disruptions and complaints, damaging the bank's reputation, and we believe this has made it increasingly difficult for the group to achieve the goals it had in mind when it acquired the U.K. business. The stepping down of TSB's CEO at the beginning of September adds uncertainty to the implementation of its business plan in the country. That said, we consider that TSB appears to have absorbed most of the reputational damage, and we do not anticipate major disruptions that could substantially further impair the overall Sabadell group's franchise. We are therefore affirming our 'BBB/A-2' long- and short-term issuer credit ratings on Banco de Sabadell, TSB's parent. The

...+ The IT migration of TSB's systems in April led to significant customer service disruptions and complaints, damaging the bank's reputation, and we believe this has made it increasingly difficult for the group to achieve the goals it had in mind when it acquired the U.K. business. + The stepping down of TSB's CEO at the beginning of September adds uncertainty to the implementation of its business plan in the country. + That said, we consider that TSB appears to have absorbed most of the reputational damage, and we do not anticipate major disruptions that could substantially further impair the overall Sabadell group's franchise. + We are therefore affirming our '###/A-2' long- and short-term issuer credit ratings on Banco de Sabadell, TSB's parent. + The outlook remains stable, reflecting our expectation that the continued improvement of Sabadell's domestic operations' financial profile somewhat mitigates the additional challenges posed by the problems experienced following TSB's IT platform...

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