Strong retail franchise in Spain. Management's proven execution capabilities of successfully implementing strategic and integration plans. Higher credit risk than peers. Relatively modest capital in the context of the high economic risk prevailing in Spain. Subdued profitability. The positive outlook on Spanish Banco de Sabadell SA reflects the possibility that we could raise our ratings on Sabadell if the following two conditions were to occur: The increasingly positive economic risk trend translates into an improvement of our economic risk assessment for Spain; and Our expectation that Sabadell will strengthen its solvency position materializes. In this scenario, we would likely improve our assessment of Sabadell's capital position because our current risk-adjusted capital (RAC) forecast would likely be strengthened to a level
