Standard & Poor’s raises Bankinter's long-term credit rating to BB+

Credit rating agency Standard & Poor´s today raised Bankinter's long-term credit rating from BB to BB+, while maintaining the short-term rating at B. The outlook in both cases continues to be "positive".

Standard & Poor´s based this decision on the improved economic situation in Spain, with GDP forecast revised upwards to 1.6% for the period 2014-2016, from the 1.2% previously forecast, as well as the gradual recovery in the financial health of households and businesses and the reduction in the volume of provisions made by the financial sector to clean up its balance sheets.

Standard & Poor´s based this decision on the improved economic situation in Spain, with GDP forecast revised upwards to 1.6% for the period 2014-2016, from the 1.2% previously forecast, as well as the gradual recovery in the financial health of households and businesses and the reduction in the volume of provisions made by the financial sector to clean up its balance sheets.

In its opinion, this more favourable economic context should help Bankinter consolidate the transformation of its business model, which is now centred on the profitable corporate banking, private banking and insurance segments, all of which contribute to the improvement in margins in a sector affected by adjustments to lending activity, falling revenues and all-time record-low interest rates.

The US agency also lays particular stress on the Bank's efforts to clean up its balance sheet, strengthen its level of capital and maintain the quality of its lending portfolio. At the end of the first quarter, Bankinter's Basel III capital ratio stood at 12%, confirming its position as one of Spain's most solid and solvent financial institutions, and its non-performing loans ratio, at 5.05%, was only just over one third of the figure for the sector as a whole.

Standard & Poor´s indicates that if this trend in the economy and the Bank's ability to generate recurring profits are maintained, it could upgrade its rating again in the next few months.