Summary: Abanca Corporacion Bancaria S.A

Slowly delivering its 2015-2017 strategic plan. Large and resilient franchise in Galicia. Retail oriented funding profile. Low operating profitability. Moderate capitalization. High stock of deferred tax assets lowers quality of capital. Low geographic diversification. The positive outlook reflects the possibility that we could raise our long-term rating on Abanca in the next 12 months if it continues strengthening its business and earnings generation capacity while controlling its risk appetite. We could also raise the ratings if the positive momentum of the Spanish economy helps Abanca to further strengthen its capital and reach a risk-adjusted capital (RAC) ratio sustainably above 7%. We could revise the outlook to stable if economic risks in Spain do not ease and Abanca proves unable to

... The positive outlook reflects the possibility that we could raise our long-term rating on Abanca in the next 12 months if it continues strengthening its business and earnings generation capacity while controlling its risk appetite. We could also raise the ratings if the positive momentum of the Spanish economy helps Abanca to further strengthen its capital and reach a risk-adjusted capital (RAC) ratio sustainably above 7%. We could revise the outlook to stable if economic risks in Spain do not ease and Abanca proves unable to strengthen its business and revenue generation further. This could occur if we were to conclude that Abanca's operating profitability is unlikely to gradually approach the Spanish banking average. We could also revise the outlook to stable if we anticipated that Abanca would have difficulties in financing its increasing loan portfolio with stable funding sources....

Summary