Press Release

DBRS Morningstar Upgrades Grupo Cooperativo Cajamar’s Long-Term Issuer Rating to BBB (low), Trend Revised to Stable

Banking Organizations
November 17, 2023

DBRS Ratings GmbH (DBRS Morningstar) upgraded the credit ratings of Grupo Cooperativo Cajamar (GCC, the Group), Cajamar Caja Rural, Sociedad Cooperativa de Credito (Cajamar), and Banco de Crédito Social Cooperativo S.A. (BCC). The Long-Term Issuer Ratings were upgraded to BBB (low) from BB (high) and the Short-Term Issuer Ratings were upgraded to R-2 (middle) from R-3. The trend on all credit ratings has been revised to Stable from Positive. The Group’s Intrinsic Assessment (IA) is BBB (low) and the Support Assessment is mantained at SA3. Cajamar’s and BCC’s Support Assessments are SA1. See the full list of credit ratings in the table at the bottom of this press release.

The upgrade of GCC´s credit ratings reflects the Group’s improved capital position and progress in reducing Non-Performing Assets (NPAs) in recent years. DBRS Morningstar considers that the Group has improved its key asset quality metrics significantly and current levels support the upgrade. DBRS Morningstar notes that the Group continues to work on improving its key risk profile metrics, despite the current challenging economic environment. The rating action also takes into account that profitability levels, albeit weak, are expected to strengthen in coming quarters on the back of solid Net Interest Income (NII) combined with a more normalized cost of risk.

The upgraded credit rating levels also reflect the Group’s medium-size and cooperative franchise in Spain, particularly in the agriculture sector in its home markets of Almeria and Valencia, which provides the Group with a stable customer deposit base. The credit ratings also take into account the lower than Spanish peer capitalization position, despite an improved capital cushion. In addition, the Group´s profitability is at the bottom range of its domestic peer group and GCC still has elevated foreclosed asset exposures.


An upgrade of the Long-Term Issuer Rating is unlikely in the near term, given the recent upgrade. However, further positive pressure on the credit ratings would require sustained improvement in its profitability metrics whilst maintaining adequate capital and asset quality metrics.

A downgrade of the Long-Term Issuer Rating would result if the Group registers a sustained deterioration in asset quality or a weakening of the Group’s capital cushions.

BCC‘s and Cajamar’s credit ratings are equalised with the credit ratings of GCC. As a result, any positive or negative actions on GCC’s credit ratings would be mirrored in the credit ratings of BCC and Cajamar.


Franchise Combined Building Block (BB) Assessment: Moderate
GCC’s IA of BBB (low) is underpinned by the Group’s sound franchise position as the largest cooperative bank in Spain, as measured by total assets. The Group enjoys a significant 15% market share for agriculture loans in Spain, and has meaningful market shares in the regions of Almeria (around 45% in loans) and Valencia (around 10% in loans). However, the Group’s national market shares are more modest at around 3% for loans at end-September 2023.

Earnings Combined Building Block (BB) Assessment: Moderate/ Weak
DBRS Morningstar views GCC’s profitability as improving, although it still remains weak. The Group recorded a net attributable profit of EUR 93.3 million in 9M 2023, resulting in an annualised Return on Equity (RoE) of 3.2%, which is still low compared to domestic peers. In 9M 2022, GCC’s net interest income (NII) rose 54.9% YoY as the majority of the Group’s loan portfolio is variable rate or has a short maturity. DBRS Morningstar expects Cajamar to continue to benefit from higher NII in coming quarters as the loan book fully reprices at higher interest rates, although it sees the benefit as being partially offset by an expected increase in deposit costs. Nevertheless, the Group still reported a high cost of risk of 101 bps in September 2023 (as calculated by GCC, and including Foreclosed Assets provisions) as the Group was still in the final stages of reducing legacy problem assets from the financial crisis. DBRS Morningstar expects the Group´s cost of risk to normalise in 2024 as the bulk of the balance sheet cleanup has been completed. The Group was not subject to the temporary financial tax in Spain, given its unique corporate structure of an Institutional Protection Scheme (IPS) consisting of 19 different credit institutions.

Risk Combined Building Block (BB) Assessment: Moderate
The recent improvement in GCC’s asset quality is a key consideration for the credit rating upgrade. The Group continued to reduce its problematic exposures in the past 12 months. At end-Q3 2023, NPAs totalled EUR 1.7 billion, down 23% YoY. As a result, the NPL ratio is almost 2.3% (as calculated by DBRS Morningstar) at end-September 2023, below the average of the Spanish Banking system. However, given its legacy foreclosed asset exposures, the Group’s NPA ratio is still higher than other domestic peers, at around 4.6% (as calculated by DBRS Morningstar). Other key risks include the impact of higher interest rates on its loan book, given that 81% of Cajamar’s loan book is either maturing or repricing within one year. In this regard, DBRS Morningstar considers the evolution of Stage 2 loans (exposures whose credit risk has significantly increased) as a key indicator. At end-June 2023 these exposures represented 6.0% of its portfolio compared to 7.3% at end-June 2022. In our view, the reduction of Stage 2 loans is an indication that Cajamar’s loan book is absorbing the interest rate shock adequately, although risks are still present. Another source of risk is the Group´s fixed income portfolio, which represented 20% of total assets at end-September 2023. Most of the fixed income portfolio is held in the amortised cost book (88% at end-June 2023), reducing capital sensitivity to credit spread changes. Nevertheless, for the fixed income portfolio, we still take into account the potential risks from unrealised losses on the back of the recent spike in interest rates.

Funding and Liquidity Combined Building Block (BB) Assessment: Good/Moderate
DBRS Morningstar views GCC’s funding and liquidity position as being underpinned by the solid and stable customer deposit base generated through its cooperative business model. At end-Q3 2023, the reported loan to deposit ratio was 83%. The Group also has a solid liquidity position supported by an adequate pool of liquid assets totalling EUR 15 billion, or 22% of end-Q3 2023 total assets. GCC reported a Liquidity Coverage Ratio (LCR) of 193% and a Net Stable Funding Ratio (NSFR) of 151% at end-Q3 2023. Funding from the European Central Bank (ECB) was around EUR 2.8 billion at end-Q3 2023, accounting for about 4.6% of total assets.

Capitalisation Combined Building Block (BB) Assessment: Moderate
GCC’s CET1 ratio (phased-in) stood at 13.43% at end-Q3 2023, down from 13.5% at end-2022, largely resulting from the calendar effect of the phased-in ratios. The Group’s total capital ratio (phased-in) stood at 15.79%. This compares to a minimum SREP Capital Requirement (OCR) for total capital of 13.03% for 2023. As a result, the capital cushion over the requirement was 276 bps, which is lower than the average of Spanish peers. However, GCC’s capital ratios and cushions over requirements have increased in recent years, as the Group´s CET1 ratio has improved by more than 200 basis points since end-2017. The cooperative credit institutions within the Group (including Cajamar) are owned by its members who contribute to capital. DBRS Morningstar views this positively as the Group’s ability to increase capital through retained profits or capital markets is limited.

Further details on the Scorecard Indicators and Building Block Assessments can be found at


There were no Environmental, Social or Governance factors that had a significant or relevant effect on the credit analysis

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (4 July 2023) -


All figures are in Euros unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (22 June 2023) In addition DBRS Morningstar uses the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at:

The sources of information used for this rating include Morningstar Inc. and Company Documents, GCC 2022 Presentation, GCC 2022 Press Release, GCC Q2 and Q3 2023 Report, GCC 2022 Annual Accounts, European Banking Authority (EBA) Risk Dashboard, and Bank of Spain Statistical Bulletin. 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.

The conditions that lead to the assignment of a Negative or Positive trend are generally 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: For further information on DBRS Morningstar historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see

The sensitivity analysis of the relevant key rating assumptions can be found at:

These credit ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Pablo Manzano, Vice President, Global FIG
Rating Committee Chair: William Schwartz, Senior Vice President, Credit Practices
Initial Rating Date: November 26, 2020
Last Rating Date: December 16, 2022

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