TEXT-S&P summary: Banco BPI S.A.

Fri Sep 14, 2012 5:11am EDT

Related Topics

(The following statement was released by the rating agency)

Sept 14 -

===============================================================================

Summary analysis -- Banco BPI S.A. -------------------------------- 14-Sep-2012

===============================================================================

CREDIT RATING: BB-/Negative/B Country: Portugal

Primary SIC: Commercial Banks

Mult. CUSIP6: G0731X

===============================================================================

Credit Rating History:

Local currency Foreign currency

14-Feb-2012 BB-/B BB-/B

16-Dec-2011 BB+/B BB+/B

31-Mar-2011 BBB-/A-3 BBB-/A-3

28-Mar-2011 BBB/A-3 BBB/A-3

27-Apr-2010 A-/A-2 A-/A-2

===============================================================================

Ratings Score Snapshot

Issuer Credit Rating BB-/Negative/B

SACP bb-

Anchor bb

Business Position Adequate (0)

Capital and Earnings Weak (-1)

Risk Position Adequate (0)

Funding and Liquidity Above Average

and Adequate (0)

Support 0

GRE Support 0

Group Support 0

Sovereign Support 0

Additional Factors 0

Major Rating Factors

Strengths:

-- Attractive position and well-recognized franchise in the Portuguese retail banking market.

-- Skilled and conservative management team.

-- Better asset quality than domestic peers.

Weaknesses:

-- Difficult economic and operating conditions in Portugal.

-- Weak capital level and poor profitability prospects.

-- Significant unrealized losses accumulated in the sovereign exposures.

-- Increasing credit impairments following asset quality deterioration.

Outlook

Standard & Poor's Ratings Services' outlook on Portugal-based Banco BPI S.A. (BPI) is negative. This reflects our view that the weak economic environment and difficult operating conditions could undermine BPI's creditworthiness.

In particular, we could lower the rating if we saw that the restructuring plan following state aid weakened the bank's business position, if funding and liquidity conditions for the bank significantly deteriorated, or if the bank's asset quality was no longer better than peers. We could also lower the rating if we changed our view on the economic and industry risks that the Portuguese banking system is facing, leading us to lower our 'bb' anchor for the domestic industry.

We could revise the outlook to stable if we see risks in the operating environment abating and leading to a stabilization of BPI's financial position.

Related Criteria And Research

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- BICRA On Portugal Revised To Group '7' From Group '5' Following Sovereign Downgrade, Feb. 14, 2012

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

-- Bank Capital Methodology And Assumptions, Dec. 6, 2010

-- Portugal's Ratings Lowered To 'BB/B'; Recovery Rating Of 4 Assigned; Outlook Negative, Jan. 13, 2012

-- Portuguese Banco BPI S.A. 'BB-/B' Ratings Affirmed On Government Subscription To Hybrid Issue; Outlook Negative

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.