We believe the privatization of NCG Banco S.A. (NCG) and the change in its ownership structure, which are still pending regulatory approval by the European authorities, have increased pressure on the bank's business position and its overall creditworthiness. This reflects our view of the potential implications for NCG of its new owners' relatively tight financial flexibility in the context of the large size of NCG compared to Banesco (the banking group NCG will now belong to). Such implications include the potential changes that NCG's new shareholders could make to the bank's long-term strategy and financial profile. These factors add to the downside risk we already saw for NCG's business position before the privatization, which reflected the challenges embedded in implementing
