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FINANCIALS: Santander - Credit Rating Upgrade from Fitch

FINANCIALS
Credit BulletsCEEMEAEurozoneSpainBullet
  • Santander moves to A rated at Fitch. Sr Pref: A, Sr Non Pref: A-, Tier 2: BBB+
  • This is one notch above the sovereign rating of Spain and represents an effective cap unless the sovereign receives an upgrade.
  • Ratings sensitivities on the downside would be
    • CET1 <13% - Currently 14.4%
    • OpInc/RWA <3% - 2024 average 3%
  • Impaired loans expected to increase to and remains around 3.5% vs 3.1% in 2024
  • CET1 expected to decline towards 13% - mgmnt guidance

Press release link - https://www.fitchratings.com/research/structured-finance/covered-bonds/fitch-upgrades-santander-to-a-outlook-stable-11-02-2025

  • Moody's remain on positive outlook for Santander at Baa1, in line with the sovereign rating. The bar for being raised above the sovereign at Moody's seems materially higher and would require improved profitability and better NPL's - neither of which are forecast. A positive rating action on the sovereign would likely improve the rating.
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  • Santander moves to A rated at Fitch. Sr Pref: A, Sr Non Pref: A-, Tier 2: BBB+
  • This is one notch above the sovereign rating of Spain and represents an effective cap unless the sovereign receives an upgrade.
  • Ratings sensitivities on the downside would be
    • CET1 <13% - Currently 14.4%
    • OpInc/RWA <3% - 2024 average 3%
  • Impaired loans expected to increase to and remains around 3.5% vs 3.1% in 2024
  • CET1 expected to decline towards 13% - mgmnt guidance

Press release link - https://www.fitchratings.com/research/structured-finance/covered-bonds/fitch-upgrades-santander-to-a-outlook-stable-11-02-2025

  • Moody's remain on positive outlook for Santander at Baa1, in line with the sovereign rating. The bar for being raised above the sovereign at Moody's seems materially higher and would require improved profitability and better NPL's - neither of which are forecast. A positive rating action on the sovereign would likely improve the rating.