DBRS Changes CaixaBank’s Trend to Stable after Sovereign Rating Trend Change; Confirms A (low)

DBRS Ratings Limited (DBRS) has today confirmed CaixaBank, S.A.’s (CaixaBank or the Bank) Unsecured Long-Term Debt & Deposit rating at A (low) and the Long-Term Critical Obligations Rating (COR) at A (high) and change the trend of both ratings to Stable from Positive. At the same time, the agency has confirmed CaixaBank’s Short-Term Debt & Deposit rating at R-1 (low) with Stable trend and the Short-Term Critical Obligations Rating at R-1 (middle) with Stable trend. The Bank’s Intrinsic Assessment (IA) remains at A (low) and the Support Assessment remains at SA3. As a result, the Bank’s final ratings are positioned in line with its IA. See a full list of ratings table at the end of this press release.

The change in the trend to Stable from Positive on the Bank’s Long-Term ratings exclusively reflects the Trend change for the Kingdom of Spain’s Sovereign rating to Stable from Positive on April 8, 2016. Caixabank’s ratings are positioned in line with the Sovereign rating of Spain indicating that given CaixaBank’s large franchise in Spain, DBRS considers that the Bank’s prospects are highly correlated with any changes made to Spain’s Sovereign rating. Caixabank’s Long-Term rating reflects the strength of its solid retail franchise in Spain, where it is the market leader in terms of loans and deposits with market shares of around 16.4% and 15.3% respectively, the Bank’s strong management capabilities, its solid funding and liquidity position and sound capital levels.

Downward pressure to CaixaBank’s ratings, although unlikely in the short to medium term, would likely be driven by a material deterioration in the Sovereign’s position and/or a sharp deterioration of the Bank’s fundamentals, particularly asset quality, capital or profitability. Upward movement to the senior ratings would likely require further improvement in the rating of the Kingdom of Spain combined with a continuation of the Bank’s solid fundamentals.

Separately, DBRS has also withdrawn the A (low) ratings on debt guaranteed by the Kingdom of Spain, as this debt has been repaid.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (December 2015). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2016), DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2016) and DBRS Criteria: Critical Obligations Rating (February 2016). These can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include company reports, the European Central Bank, European Banking Authority, Bank of Spain and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance.

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/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: Maria Rivas
Rating Committee Chair: Elisabeth Rudman
Initial Rating Date: March 4, 2013
Most Recent Rating Update: November 20, 2015

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Information regarding DBRS ratings, including definitions, policies and methodologies are available on www.dbrs.com.