DBRS Upgrades LT Ratings of Santander Totta to “A”, Stb trend

DBRS, Inc. (DBRS) has upgraded the long-term ratings of Banco Santander Totta S.A. (Totta or the Bank) following the upgrade of its parent, Banco Santander S.A. (Santander or the Parent). DBRS has upgraded Totta’s Long-Term Issuer Rating to “A” from A (low), while its Short-Term Issuer Rating was confirmed at R-1 (low). The trend on all ratings remains Stable, in line with the rating of the Parent. Totta’s support assessment remains SA1.

KEY RATING CONSIDERATIONS
These rating actions follow DBRS’s upgrade of Santander’s senior long-term ratings by one notch to A (high), with a Stable trend. Santander rating action was triggered after DBRS upgraded the Kingdom of Spain by one notch to A, with Stable trend on April 6, 2018. Totta’s SA1 designation implies strong and predictable support from the Parent, and Totta’s rating will generally move in tandem with Santander’s long-term debt ratings. The SA1 designation considers Totta’s important role as a core component of Santander’s international franchise and DBRS’s expectation that Santander has the willingness and ability to support Totta, if needed.

RATING DRIVERS
Positive rating pressure would likely be linked to improvement in Santander’s long-term debt ratings. Alternatively, a downgrade of Santander’s ratings would also likely negatively impact Totta’s ratings. Any indication of a reduction of support from the Parent could impact DBRS’s support assessment, and potentially have a negative impact on Totta’s ratings.

RATING RATIONALE
Santander Totta SA is a commercial bank in Portugal owned by Santander that provides universal banking services to individuals, small- and medium-sized enterprises and large corporations. With the acquisition of Banco Popular Portugal S.A., DBRS sees Banco Santander Totta as further solidifying its position as the #2 bank in Portugal. DBRS assumes that support from the Parent would be forthcoming for Totta in a timely manner, as the reputational consequences for Santander of any perceived lack of support would be substantial.

Notes:
All figures are in EUR unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (May 2017), and DBRS Criteria: Guarantees and Other Forms of Support (February 2017), which can be found on our website under Methodologies.
The primary sources of information used for this rating include company documents and SNL Financial, company reports, European Banking Authority (EBA) and European Central Bank (ECB). 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, Senior Vice President - Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of EU FIG, Global
Initial Rating Date: July 18, 2012
Most Recent Rating Update: December 7, 2017

The rated entity or its related entities did participate in the rating process. DBRS did have access to the accounts and other relevant internal documents of the rated entity or its related entities.

For more information on this credit or on this industry, visit www.dbrs.com.