4 June 2014
- The rating agency improves the bank's rating to BBB- with a positive outlook
- This new rating reflects the success of the business diversification strategy
- Standard & Poor's believes that Cecabank has achieved a very high level of capitalisation thanks to the process of deleveraging and risk reduction
The rating agency Standard & Poor's has raised the long-term and short-term rating of Cecabank. The company is now at BBB- and A-3 respectively, keeping its positive outlook. The individual credit profile also has improved from BB + to BBB-.
According to the agency, the new rating reflects the success of the diversification strategy towards the Securities Services business.It also reflects Cecabank's role as a strategic provider of services in the Spanish banking sector.
The agency found that Cecabank's solvency position had consolidated in recent quarters. It also found that the company reduced its exposure to credit and market risk. The decision has benefited from the increase of the amount set aside for reserves in the last year. As such, Standard & Poor's now measures the entity's capital and profit level as "strong", up from "adequate".
Lastly, Standard & Poor’s deems that the positive outlook of Cecabank is strengthened with the improvement in the forecast of GDP growth between 2014 and 2016 and the expansive monetary policy that the agency expects the authorities of the eurozone to maintain. The positive valuation of the Spanish banking system also contributes to the improved rating; according to Standard & Poor's, it has managed to absorb the losses associated with the adjustment of the real estate sector and the double recession.
