Fitch views Banco Comercial positively

Fitch Ratings said it revised Banco Comercial Portugues, SA's outlook to positive from stable while affirming the bank's long-term issuer default rating at BB.

“The outlook revision reflects significant progress in organically reducing problem assets since end-2019, despite the challenges the pandemic posed to the operating environment in Portugal, and our expectation that this trend will continue in the near future.

“The outlook change also reflects increased clarity around the provisioning needed to cover legal risks from Bank Millennium SA's (BB/stable/bb) Swiss franc-denominated mortgage loans in Poland. In our view, these large legal costs, which will continue, will not materially derail BCP's capital trajectory due to its better pre-impairment profitability than similarly rated peers,” Fitch said in a press release.

Additionally, the agency noted Portugal’s healthy economic performance this year and the positive outlook for the operating environment.

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