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

Mon Dec 24, 2012 8:38am EST

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(The following statement was released by the rating agency)

Dec 24 -

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Summary analysis -- Ibercaja Banco S.A. --------------------------- 24-Dec-2012

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CREDIT RATING: BB+/Watch Neg/B Country: Spain

Primary SIC: Commercial banks,

nec

Mult. CUSIP6: 46270A

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Credit Rating History:

Local currency Foreign currency

23-Nov-2012 BB+/B BB+/B

30-Apr-2012 BBB-/A-3 BBB-/A-3

13-Feb-2012 BBB/A-2 BBB/A-2

15-Dec-2011 BBB+/A-2 BBB+/A-2

11-Oct-2011 A-/A-2 A-/A-2

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Major Rating Factors

Strengths:

-- Dominant position in traditional markets in northeastern Spain.

-- Conservative risk management.

-- Better asset quality than the Spanish system average.

Weaknesses:

-- Weak capital.

-- Constrained revenue prospects.

-- Significant exposure to the real estate sector.

-- Lower business and geographic diversification than large domestic

peers.

CreditWatch

The CreditWatch placement follows IberCaja Banco S.A.'s shareholders' announcement on Nov. 29, 2012, of a potential agreement to acquire Spain-based Banco Grupo Cajatres (not rated). The CreditWatch status reflects the possibility that Standard & Poor's Ratings Services might lower the ratings on IberCaja by one notch if we decided that the acquisition weakened our view of IberCaja's creditworthiness.

We aim to resolve the CreditWatch placement on completion of the transaction and after we review a complete set of business and financial information on Cajatres and the combined group.

We will assess the impact of the acquisition on IberCaja's financial profile, especially on its risk position. If as a result we were to lower our assessment of IberCaja's stand-alone credit profile (SACP) by one notch, this could trigger a one-notch downgrade of the bank. If we saw no negative impact on IberCaja's SACP, we could affirm the ratings at their current level.

We might also affirm our ratings on IberCaja and remove them from CreditWatch if the acquisition was not completed, and if our view of IberCaja's SACP remained unchanged despite the strategic challenges it faces in the increasingly consolidated financial system.

Ratings Score Snapshot

Issuer Credit Rating: BB+/Watch Neg/B

SACP: bb+

Anchor: bb+

-- Business Position: Adequate (0)

-- Capital and Earnings: Weak (-1)

-- Risk Position: Strong (+1)

-- Funding: Average (0)

-- Liquidity : Adequate

Support: (0)

-- GRE Support: (0)

-- Group Support: (0)

-- Sovereign Support: (0)

Additional Factors: (0)

Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit Portal.

-- Spain-Based Bank Ibercaja 'BB+' Rating Placed On CreditWatch Negative On Potential Banco Grupo Cajatres Acquisition, Dec. 4 2012

-- Various Rating Actions On Spanish Banks Due To Rising Economic Risks, Nov. 23 2012 -- IberCaja Ratings Lowered To 'BB+/B' On Rising Economic Risk In Spain; Outlook Negative, Nov. 23, 2012

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

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011 -- Bank Capital Methodology And Assumptions, Dec. 6, 2010

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