Outlook: Stable
Action date: 07/24/2020
Rating action: Downgrade


We reviewed our unsolicited credit rating of CaixaBank S.A. (hereinafter CaixaBank) from A to A - with a stable outlook based on the expected impact that the current economic shock will have on the Bank's situation compared to its rating peers, given its high presence in the Iberian market - highly affected by the complex macroeconomic scenario caused by the COVID-19 and for which we forecast a decline in Spanish GDP of 10,8%-, causing a reduction in banking profitability, an increase in non-performing loans and downward pressure on capitalization, as well as an expected adjustment in the valuation of its financial assets heightening market risk. These consequences have already been reflected in the results of the first quarter of the year despite the partial effects of the crisis in that period. However, even with these challenges, our rating range continues to consider CaixaBank's leading position in Spanish and Portuguese banking sector, the group's broad diversification of income, the entity's moderate risk profile and the process of improving fundamentals in recent years with a reduction in non-performing loans and a strengthening of the liquidity position that has been accompanied by the ECB's accommodative policies. Likewise, it is worth noting the adequate capitalization with a wide margin over the supervisor's requirements, the higher coverage of non-performing loans compared to the Spanish banking sector and a stable financing structure based on deposits and complemented by the affordable access to capital markets and the low cost of funding by the central bank.


Date last rating: 07/24/2020
Date first rating: 07/24/2019