DBRS raises Kutxabank

DBRS said it upgraded the long-term issuer rating of Kutxabank SA and Cajasur Banco, SA to A from A (low) and Kutxabank’s senior non-preferred debt credit rating to A (low) from BBB (high). The agency revised the trend to stable from positive.

“The upgrade of Kutxabank’s long-term credit ratings reflects the bank’s improved profitability on the back of higher interest rates and low deposit beta as well as high-efficiency levels and low cost of risk. Morningstar DBRS expects that this improvement should be sustained going forward as a large share of Kutxabank’s portfolio is still set to reprice at higher interest rates and the bank’s total provisions should remain contained.

“The credit rating action also takes into account Kutxabank’s strong asset quality metrics underpinned by a significant reduction in non-performing assets (NPAs) in recent years, strong coverage ratios as well as a low credit risk profile stemming from a large share of retail mortgages,” DBRS said in a statement.

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