Fitch Affirms BBVA Bancomer and Subsidiaries' Ratings; Outlook Revised to Positive

viernes 23 de mayo de 2014 12:33 GYT

(The following statement was released by the rating agency) MONTERREY, May 23 (Fitch) Fitch Ratings has today affirmed BBVA Bancomer's Viability rating (VR) at 'a-', its long term foreign- and local-currency Issuer Default Ratings (IDRs) at 'A-'; and its short term foreign- and local-currency IDRs at 'F1'. The long- and short-term National scale ratings for BBVA Bancomer and those of its affiliates Casa de Bolsa BBVA Bancomer, S.A de C.V., Grupo Financiero BBVA Bancomer (CBBB) and Facileasing, S.A. de C.V. (Facileasing); were affirmed at 'AAA(mex)' and 'F1+(mex)', respectively. Fitch revised the Rating Outlook of BBVA Bancomer's long-term IDRs to Positive from Stable. BBVA Bancomer's Support Rating was affirmed at '2' and its Support Rating Floor at 'BBB-'. The bank's global issuance of junior subordinated debt was affirmed at 'BB+' and its foreign and local issuances of subordinated debt at 'BBB-' and 'AA-(mex)', respectively. See the full list of rating actions at the end of this rating action commentary. BBVA Bancomer KEY RATING DRIVERS BBVA Bancomer's VR, IDRs and National scale ratings do not factor in any extraordinary support from its parent, despite being considered by Fitch a core subsidiary of its holding company, Banco Bilbao Vizcaya Argentaria (BBVA, rated 'BBB+' by Fitch with a Stable Outlook). On April 28, 2014, Fitch stated that the agency sees rating upside potential for some Spanish banks (including BBVA) following its recent upgrade of Spain's sovereign rating by one notch (see 'Fitch Upgrades Spain to 'BBB+'; Outlook Stable' published April 25, 2014, available on The agency expects to review the credit fundamentals and ratings of Spanish banks that may benefit most from the improved sovereign dynamics in the near future. As part of its assessment Fitch will also review the banks' rating sensitivities, including with respect to the sovereign rating. BBVA Bancomer's ratings are driven by its leading franchise in the Mexican banking system, ranking first by total assets, customer deposits and loan portfolio; its ample and steady customer base, as well as its historically solid and relatively higher profitability metrics. The bank's reasonable asset quality metrics and capital base are also considered; however, both compare unfavourably against BBVA Bancomer's main competitor. The Positive Outlook reflects the gradual improvements in core capital metrics, which Fitch believes will continue, coupled with the structural strengths of the bank, and its moderately improved asset quality, with a gradually decreasing impairment ratio. BBVA Bancomer's Support Rating and Support Rating Floor were affirmed at '2' and 'BBB-', respectively, given the bank's systemic importance and its role as the largest Mexican bank. Fitch's support rating floors indicate a level below which the agency will not lower the bank's Long term IDRs as long as the assessment of the support factors does not change. The bank's global junior subordinated debt is rated four notches below the anchor rating, BBVA Bancomer's VR, while the foreign and national subordinated debt is rated three notches below its VR and National long-term rating, respectively. The ratings are driven by Fitch's approach of factoring in the loss severity in view of the respective degrees of subordination (-1 for the plain subordinated notes and -2 for the junior subordinated notes), plus the effect of non-performance risk (-2 notches in both types of securities). RATING SENSITIVITIES BBVA Bancomer's VR could be upgraded if the bank sustains and consolidates the recent improvements in capital adequacy (Fitch core capital ratio above 12% and/or tangible common equity ratio above 10%), while maintaining the gradual recovery of asset quality (impairments below 3% of total loans) and maintaining other credit strengths. In turn, the Outlook on BBVA Bancomer's ratings could be revised to Stable if the recent improvements in capital and asset quality metrics are not sustained according to Fitch's expectations stated above. The bank's IDRs could be positively affected by an upgrade of its VR. Alternatively, these ratings could also benefit from a multi-notch upgrade of its parent company, given that the entity is considered core for BBVA. A potential upgrade or downgrade of BBVA Bancomer's Support Rating and Support Rating Floor will be driven by a change in Mexico's sovereign rating and/or a change in the expected propensity of support from the Mexican government; both factors with a low probability of occurrence at present. The bank's subordinated debt ratings will likely mirror any change in its VR, as these issue ratings are expected to maintain the same relativity to BBVA Bancomer's intrinsic profile. GFBB's Subsidiaries The ratings of CBBB and Facileasing reflect the legal obligation of GFBB to support its subsidiaries, as well as Fitch's view that these entities remain core for the group's strategy and overall business profile. The credit profile of GFBB is associated with that of its main subsidiary, BBVA Bancomer. Although Facileasing's ultimate parent is BBVA, Fitch recognizes that this entity is core for GFBB's business profile and local franchise. RATING SENSITIVITIES A downgrade of GFBB's non-banking subsidiaries will be driven by any potential changes in BBVA Bancomer's ratings or in the legal framework that could alter the propensity of the group to support them, an unlikely scenario at present; and/or by a change in each entity's strategic importance to the group. Fitch affirms the following ratings: BBVA Bancomer, S.A.: --Long-term foreign and local currency IDRs at 'A-', Outlook revised to Positive from Stable; --Short-term foreign and local currency IDRs at 'F1'; --Viability rating at 'a-'; --Support rating at '2'; --Support rating floor at 'BBB-'; --National-scale long-term rating at 'AAA(mex)', Outlook Stable; --National-scale short-term rating at 'F1+(mex)'; --Long-term 'plain vanilla' subordinated notes at 'BBB-'; --Long-term junior subordinated notes at 'BB+'; --Long-term senior unsecured global notes at 'A-'; --National-scale long-term rating for local subordinated debt issues at 'AA-(mex)'; --National-scale long-term rating for local senior unsecured debt issues at 'AAA(mex)'; --National-scale long-term rating for local issues of market linked securities at 'AAAemr (mex)'. Casa de Bolsa BBVA Bancomer, S.A. de C.V.: --National-scale long-term rating at 'AAA(mex)', Outlook Stable; --National-scale short-term rating at 'F1+(mex)'. Facileasing, S.A. de C.V.: --National-scale long-term rating at 'AAA(mex)', Outlook Stable; --National-scale short-term rating affirmed at 'F1+(mex)'; --National-scale long-term rating for local senior unsecured debt issues at 'AAA(mex)'; --National-scale short-term rating for local senior unsecured debt issues at 'F1+(mex)'. Contact: Primary Analyst (BBVA Bancomer and CBBB) Monica Ibarra Director +52 818 399 9150 Fitch Mexico S.A. de C.V. Prol. Alfonso Reyes 2612 64920 Monterrey, Mexico Primary Analyst (Facileasing) Alba Zavala Analyst +52 818 399 9137 Secondary Analyst (BBVA Bancomer, CBBB and Facileasing) Alejandro Garcia, CFA Senior Director +52 818 399 9146 Committee Chairperson Franklin Santarelli Managing Director +1 212 908 0739 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: Additional information is available on Applicable criteria and Related Research: --'Global Financial Institutions Rating Criteria' (Jan. 31, 2014) --'Finance and Leasing Companies Criteria' (Dec. 11, 2012) --'Securities Firm Criteria' (Jan. 31, 2014) --'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012) --'Assessing and Rating Bank Subordinated and Hybrid Securities' (Jan. 31, 2014) --'National Scale Ratings Criteria' (Oct. 30, 2013) --'2014 Outlook: Mexican Commercial Banks' (Dec. 13, 2013) Applicable Criteria and Related Research: National Scale Ratings Criteria here 2014 Outlook: Mexican Insurance Market (Substantial Changes in Regulation but Challenges Remain) here Assessing and Rating Bank Subordinated and Hybrid Securities Criteria here Rating FI Subsidiaries and Holding Companies here Securities Firms Criteria here Finance and Leasing Companies Criteria here Global Financial Institutions Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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