DBRS Morningstar Revises Trend on BBVA’s COR Ratings to Stable after Sovereign Rating Action

DBRS Ratings GmbH (DBRS Morningstar) revised the Trend on Banco Bilbao Vizcaya Argentaria, S.A. (BBVA or the Group)’s AA (low) Long-Term Critical Obligations (COR) rating and R-1 (middle) Short-Term Critical Obligations rating to Stable from Positive. BBVA’s Issuer, Senior and Deposit Ratings as well as the Intrinsic Assessment (IA) are unaffected by this rating action. See the full list of ratings at the end of this press release.

KEY RATING CONSIDERATIONS

The change of the Trend on the Long-Term and Short-Term COR to Stable from Positive is driven by DBRS Morningstar’s rating action on the Spanish Sovereign Rating. On May 29, 2020, DBRS Morningstar confirmed the Kingdom of Spain’s ratings at “A”/R-1 (low) and revised the Trend to Stable from Positive (DBRS Morningstar Confirms Kingdom of Spain at “A”, Trend Changed to Stable). DBRS Morningstar rates BBVA’s COR ratings one notch above its IA as BBVA’s IA is positioned one notch above the Kingdom of Spain’s rating, to reflect the Group’s geographical diversification. As a result, BBVA’s Long-Term COR rating is AA (low), however the Trend has been changed to Stable, in line with the Trend on the sovereign rating.

RATING DRIVERS

The Long-Term and Short-Term Critical Obligations ratings of BBVA will generally be affected by changes in the Bank’s IA. An upgrade would therefore follow an upgrade of the Bank’s IA. An upgrade could also occur following an upgrade of the Kingdom of Spain.

Similarly, a downgrade could be driven by a multi-notch downgrade of the Bank’s IA or a downgrade of the Kingdom of Spain’s ratings

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792

The Grid Summary Grades for Banco Bilbao Vizcaya Argentaria, S.A. are as follows: Franchise Strength – Very Strong/Strong; Earnings Power – Strong; Risk Profile – Strong/Good; Funding & Liquidity – Strong; Capitalisation – Strong.

Notes:
All figures are in EUR unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (11 June 2019) https://www.dbrsmorningstar.com/research/346375/global-methodology-for-rating-banks-and-banking-organisations

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883

The sources of information used for this rating include Company Documents, BBVA 2019 Presentation, BBVA 2019 Press Release, BBVA 4Q 2019 Report, BBVA 2019 Annual Accounts, European Banking Authority 1H 2019 Risk Dashboard and S&P Global Market Intelligence. DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

DBRS Morningstar 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 12-month period. DBRS Morningstar's outlooks and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

The sensitivity analysis of the relevant key rating assumptions can be found at: https://www.dbrsmorningstar.com/research/362039

Ratings assigned by DBRS Ratings GmbH are subject to EU and U.S. regulations only.

Lead Analyst: Arnaud Journois, Vice President – Global Financial Institutions
Rating Committee Chair: Elisabeth Rudman - Managing Director, Head of European FIG - Global FIG
Initial Rating Date: November 23, 2009
Last Rating Date: April 1, 2020

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