Fitch downgrades Sabadell

Fitch Ratings said it downgraded Banco de Sabadell SA's long-term issuer default rating to BBB- from BBB removed it from rating watch negative.

The downgrade reflects the economic fallout from the pandemic on the bank's credit profile. In particular, it reflects the significant influence that Sabadell's exposure to Spanish small and medium-sized enterprises, which Fitch said it sees as more vulnerable borrowers.

“In addition, the worse than expected performance of its U.K. subsidiary, exacerbated by the challenging operating environment in the U.K., negatively affects Sabadell's profit generation capabilities and our assessment of its business model,” Fitch said in a press release.

The outlook is stable.

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