The financial rating agency Fitch raised this Friday the ‘rating’ of BCP from ‘BB’ to ‘BB+’, approaching one step away from speculative investment, justifying the decision with the progress in the reduction of problematic assets, with a stable outlook.
In a comment on the rating action, Fitch notes that the update reflects “significant progress” in reducing problem assets since the end of 2019, despite the challenges that the pandemic period has imposed on the operating environment in Portugal.
We expect this reduction in problem assets to continue in the near future, albeit at a slower pace,” he justifies.
The improvement in the ‘rating’ of BCP by Fitch leaves the bank one step away from speculative investment grade. The earnings outlook is better due to higher interest rates, “strong cost efficiencies” and “a significantly reduced balance sheet risk.”
As a result, capital ratios rose to more appropriate levels,” he says.
The agency stresses that BCP’s ‘rating’ reflects the improvement in the quality of the bank’s assets, highlighting that the BCP’s impairment rate fell slightly below 4% at the end of 2022, due to the active management of the bad debt, specifically through limited sales and inflows of new impairment loans.
For this reason, it considers “that it is already close to the domestic peers with the highest rating, although the problematic assets index remains slightly above the average for banks in southern Europe.”
Fitch notes that the group’s capitalization has improved, but it remains exposed to costs related to potential litigation through its Polish subsidiary.
At around 4:30 p.m., BCP shares were down 4.98% at 0.1832 euros.
Source: Observadora
