Transfer of real estate assets to SAREB (the "bad bank" created by the Spanish government). Solid franchise in home region of Galicia. Difficult economic and operating environment in Spain. Challenging restructuring plan. High reliance on extraordinary financing facilities from the European Central Bank. Standard&Poor's Ratings Services' outlook on Spain-based NCG Banco is negative, reflecting the possibility that we could lower the ratings if: The bank underperforms our capital forecasts, with less deleveraging or a weaker performance than we currently expect; The bank's restructuring proves more difficult than we expect or impairs its stability and franchise; or Contrary to our base-case expectations, the bank fails to progressively reduce its reliance on European Central Bank (ECB) funding. A review of
