DBRS Confirms Ratings of Targobank at A (low) After Confirmation of BPE

DBRS, Inc. (DBRS) has today confirmed the ratings of Targobank following the confirmation of one of its parents, Banco Popular Español S.A. (Popular). Targobank is a Spanish bank that was created in 2010 as a joint venture by Popular and Groupe Crédit Mutuel–CIC (Crédit Mutuel) that is jointly controlled and owned by both Crédit Mutuel and Popular. DBRS has confirmed Targobank’s Senior Long-Term Debt & Deposit rating at A (low) with a Negative trend and Short-Term Debt & Deposit rating at R-1 (low) with a Stable trend.

These rating actions follow DBRS’s confirmation of Popular’s Senior Unsecured Long-Term Debt & Deposit rating at A (low) with a Negative trend and Short-Term Debt & Deposit rating at R-1 (low) with a Stable trend.

DBRS maintains its SA1 support assessment for Targobank. The SA1 designation implies strong and predictable support from the parent. As a supported rating with an SA1 designation, Targobank’s rating will generally move in tandem with Popular’s long-term debt ratings. The equalization of Targobank’s long-term debt rating of A (low) with Popular’s long-term debt rating of A (low) reflects the position of Targobank as a banking subsidiary domiciled within Spain. DBRS does not have a public rating on Crédit Mutuel, but takes into account Crédit Mutuel’s significant position in the French banking system and its international banking activities. Given the strategic relationship between Popular and Crédit Mutuel, DBRS expects that the parents would agree upon arrangements to support Targobank in the event that support should be needed.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations. Other methodologies used include the DBRS Criteria – Intrinsic and Support Assessments. Both can be found on the DBRS website under Methodologies.

The sources of information used for this rating include the issuer, SNL Financial and the DBRS rating of the Kingdom of Spain. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Lisa Kwasnowski
Rating Committee Chair: Alan G. Reid
Initial Rating Date: 11 October 2006
Most Recent Rating Update: 10 August 2012

For further information on DBRS’ historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository see http://cerep.esma.europa.eu/cerep-web/

The conditions that lead to the assignment of a Negative or Positive Trend are generally resolved within a twelve month period. DBRS’s trends and ratings are constantly under surveillance.

For additional information on this rating, please refer to the linking document under Related Research.