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EMEA Financial Institutions Monitor 3Q2021: Resilience Amid The Search For Stronger Profitability

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COVID-19 Impact: Key Takeaways From Our Articles

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Global Actions On Corporations, Sovereigns, International Public Finance, And Project Finance To Date In 2021

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U.S. State Ratings And Outlooks: Current List

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History Of U.S. State Ratings


EMEA Financial Institutions Monitor 3Q2021: Resilience Amid The Search For Stronger Profitability

S&P Global Rating believes that banks in EMEA will remain resilient in the months ahead. Indeed, we now project that asset quality will weaken less than we previously expected and certainly far less than during the global financial crisis in 2009. Underpinning our views are the rollout of vaccines, falling COVID-19 case numbers, and extensive policy support, which have strengthened the economic rebound across Europe, the Middle East, and Africa (EMEA). However, negative interest rates are likely to persist in the eurozone well into 2024, undermining profitability for many banks in the region, operating in overbanked markets.

We think EMEA banks face the following key risks in the next two years:

  • Interruption or reversal of the recovery. This could arise because vaccination campaigns are far from complete, uneven across the region, with a risk of vaccine-resistant new variants arising. Moreover, a premature or overly abrupt phaseout of fiscal stimulus could result in higher asset quality problems for banks than we currently anticipate, higher provisioning needs, and weaker profitability. When and how to rebalance policy settings are two big questions for decision-makers across the region that might affect the banking sector.
  • Limited success in revamping their operating models, adapting quickly to an increasingly digitalized word, and improving profitability. Banks' capacity to build up capital internally and externally, and ultimately their ability to effectively channel credit to the economy, will depend on their ability to transform their business processes efficiency to adjust to a highly competitive and rapidly changing operating landscape.
  • A reversal of today's favorable market conditions, ultimately increasing funding costs for governments, companies, and banks--or causing greater difficulties in accessing funding. This could happen either because continued inflationary pressures will eventually require a shift in extremely accommodative monetary policy or because of a turn in investors' risk appetite.
  • Distortion of risk pricing and the buildup of asset bubbles, particularly in the property market, as a result of prolonged accommodative monetary policy and excess savings.

We recently reviewed a number of our ratings on banks in EMEA, including on about 60 European banking groups domiciled in 10 European countries. As a result, our rating outlook bias is now predominantly stable instead of markedly negative.   We revised outlooks on many EMEA banking groups to stable from negative, but also downgraded a small number of financial institutions where our ratings did not already fully reflect the issues they face over the near two to three years (77% of ratings on EMEA banks had stable outlooks as of July 1, 2021, versus 61% on April 1, 2021; see chart 3). Among those are about 60 banking groups domiciled in Austria, Belgium, France, Germany, Ireland, Italy, The Netherlands, Poland, Spain, and the U.K. These rating actions also reflect our revised view that risks are gradually stabilizing for the region's banks (see table 1).

Table 1

Summary Of Changes To EMEA BICRAs In 2Q2021
Banking system BICRA Group Economic Risk / Trend Industry Risk / Trend Anchor SACP*
From To From To From To From To
Austria 2 2 2 / Negative 2 / Stable 3 / Stable 3 / Negative a- a-
Belgium 2 2 2 / Negative 2 / Stable 3 / Stable 3 / Stable a- a-
France 3 3 3 / Negative 3 / Stable 3 / Negative 4 / Stable bbb+ bbb+
Germany 2 3 1 / Negative 1 / Stable 3 / Negative 4 / Stable a- bbb+
Greece 9 8 9 / Stable 8 / Stable 8 / Stable 8 / Stable b+ bb-
Ireland§ 4 4 5 / Stable 5 / Positive 4 / Negative 4 / Negative bbb bbb
Italy§ 5 5 6 / Negative 6 / Negative 5 / Stable 5 / Stable bbb- bbb-
Kenya 9 9 8 / Negative 9 / Stable 9 / Stable 9 / Stable b+ b+
Netherlands 3 3 3 / Negative 3 / Stable 3 / Stable 3 / Stable bbb+ bbb+
Poland 4 4 4 / Negative 4 / Stable 5 / Negative 5 / Negative bbb bbb
South Africa 6 6 7 / Negative 7 / Stable 5 / Stable 5 / Stable bb+ bb+
Spain§ 4 4 4 / Negative 4 / Negative 4 / Stable 4 / Stable bbb bbb
Tunisia 10 10 10 / Stable 10 / Stable 9 / Stable 9 / Negative b b
United Arab Emirates 5 5 5 / Negative 6 / Stable 5 / Negative 5 / Stable bbb- bbb-
U.K. 3 3 4 / Negative 4 / Stable 3 / Stable 3 / Stable bbb+ bbb+
Changes are marked in bold. *Applies to domestically-focused banks. §We revised sub-scores within the unchanged industry risk assessment. SACP--Stand-alone credit profile. **We revised the assessment on March 25, 2021

Apart from further asset quality weakening in 2021, we consider that downside risks have been lessening for EMEA banks, supporting profitability and capitalization.  We project that the vast majority of European banks will report an improvement in financial results for 2021. We believe that credit impairment charges will start normalizing, and a rebound in economic activity across the region could gradually improve fee and commission income.

We see returning demand for credit from households as a main credit growth driver in 2021. There is evidence of growing mortgage demand in a few countries, and consumer lending is likely to rebound gradually as private consumption takes off after more than a year of excess saving and deleveraging. At the same time, we recently observed a gradual reduction in accumulated customer deposits in certain markets, which might also support retail lending prospects. While we saw some demand for new lending in 2020 from corporate borrowers--including under government-guaranteed support schemes--this was a short-lived trend, in many markets they did not fully tap these funds. Moreover, corporate lending growth has been decelerating in some markets of the region in the past few months because many companies have been deleveraging and have not yet resumed their investment plans.

We expect problem loans to further increase, particularly in banks' corporate loan books. Nevertheless, better economic prospects ahead should support borrowers' creditworthiness, resulting in a manageable increase in nonperforming assets at most banks. Asset quality performance will vary across banks and countries. It will be noticeably weaker in the sectors most vulnerable to social-distancing measures, such as transportation, hospitality, entertainment, and retail.

Net interest income will remain weak. A rebound in corporate lending growth will take time, while the recovery in mortgage lending only somewhat support banking margins, given persistently low interest rates and competitive mortgage markets. Overall, bank performance across EMEA could be somewhat more buoyant, at least on the surface, in 2021.

Recent bank downgrades and longstanding negative outlooks reflect weaker business models.  Along with gradual stabilization of the operating environment for banks in EMEA, we note digitalization, low policy rates, and shallow yield curves continue to test some banking sectors, businesses, and operating models. Across these diverse banks and markets, we see diverging profitability trends and credit stories.

Sectors like those in Sweden and Norway tend to benefit from relatively high market concentration, existing strong efficiency, and rapid adoption of digital technologies by customers. In the U.K., Belgium, and The Netherlands, we see these factors as less compelling strengths, but nonetheless generally likely to deliver cost of capital. This is less the case for players that lack scale or differentiated propositions that offer a sustainable competitive advantage. We see deeper problems in other markets, notably Germany and France, but also Italy and Spain.

Banking sector capitalization should gradually normalize from highs in 2020.  Regulatory capital ratios as of end-2020 were high for many banks because of temporary restrictions on dividend payments and capital distributions that many regulators in EMEA introduced. Ratios will likely normalize as regulators start to cautiously relax these limitations and banks resume dividend payment programs. Plus, with a moderate risk appetite in 2021 and substantial provisions for potential pandemic-related losses (created in 2020), in our view banks across the region are set to return to more normal operating conditions.

Credit conditions in emerging markets continue improving.  Credit conditions in emerging markets continue improving. Emerging economies on average are recovering faster than we previously expected. We recently raised our forecasts for GDP growth in 2021 for Russia (to 3.7%) and South Africa (4.2%), and we maintain our forecast 6.1% growth for Turkey. The reasons for this are sustained economic recovery in developed countries and in many cases improving domestic demand as activities in emerging economies resume. Notably, the economic fallout from intermittent pandemic-related lockdowns hasn't been as severe as from initial social-distancing measures in early 2020. However, downside risks remain. These are some of the additional challenges banking sectors in EMs face:

  • Achieving herd immunity through vaccination is important to economic recovery and consumer and business confidence. Russia and South Africa were recently hit by a third wave of the pandemic. At the same time, vaccination levels in emerging economies are lagging those in more developed countries and diverging widely (see chart 1), representing an additional risk to the recovery of small and midsize enterprises, travel, retail, and services.
  • A rapid adjustment in U.S. interest rates and persistent inflation, which could worsen financing conditions.
  • Escalation of geopolitical tensions, for several emerging markets in the region. The potential for new sanctions on Russia remains, despite recent talks with the U.S. The Belarusian banking sector faces intensifying sanctions from the EU and the U.S. following disputed presidential elections in August 2020, which we consider to be manageable for banks for now. The potential reinstatement of the Iran nuclear deal in 2021, while broadly positive, will nevertheless continue to be a source of tension for Israel and Saudi Arabia. Turkey's increasing regional ambitions have also ruffled feathers within the region, even with long-standing allies.

Chart 1

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Key Banking Sector Risks In EMEA

The table below presents S&P Global Ratings' views about the key risks and risk trends for banking sectors in EMEA where we rate banks. For more detailed information, please refer to the latest Banking Industry Country Risk Assessment (BICRA) on a given country. According to our methodology, BICRAs fall into groups from '1' to '10', ranging from what we view as the lowest-risk banking systems (group '1') to the highest-risk (group '10').

Table 2

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Selected Research

We recently published several articles highlighting our views on EMEA banking sectors:

The Future Of Banking

Technological disruption leads to new customer expectations and new forms of competition, but also offers new opportunities for banks. All these trends may ultimately influence the credit profiles of banking industries across the globe. We have published several articles highlighting our views on the readiness of various banking sectors to face the challenges and opportunities arising from the development of financial technology and digital transformation:

Economic, Sovereign, And Other Research

Rating Methodology News

BICRA Changes

Since we last published this report, we made the following changes to our BICRAs.

Austria

We have revised our economic risk trend for Austria to stable from negative. This reflects our view that the economic risks facing Austrian banks due to COVID-19 and associated containment measures have eased. We remain mindful that nonperforming loans (NPLs) could increase into 2022 as fiscal support measures are gradually withdrawn, but we believe the residual impact on the banking system is likely to be manageable. We expect the private sector's financial health will not deteriorate materially, and the increase in corporate bankruptcies and unemployment will be contained due to the slow and gradual phaseout of government support to most affected industries coupled with the ongoing recovery.

We have also revised our industry risk trend for Austria to negative from stable. We think that risks to the banking system stability could increase unless Austrian banks speed up their efforts to improve efficiency, focusing on both stringent cost management and revenue expansion, specifically in fee-generating operations. We think that if the Austrian banking regulator were to establish a more demanding stance to support the banking groups' transition to improve structural profitability and increase digitalization, this might add to the transformative momentum.

Belgium

We have revised our economic risk trend for Belgium to stable from negative. Belgium's macroeconomic recovery on the back of unprecedented government support, the European Central Bank's ample monetary policy support, and ongoing vaccination rollout are improving prospects for domestic banks. Consequently, we estimate that risks to asset quality and banks' capitalization are receding, even though defaults of small and midsize enterprises and larger corporates are likely to increase as government support schemes are phased out.

Greece

We have revised our BICRA for Greece to Group '8' from Group '9', and our economic risk score to '8' from '9'. We raised the long-term sovereign rating on Greece to 'BB' from 'BB-' on our expectation government policies will steer toward structural reforms, which, together with the expected deployment of EU funds, would result in improved economic performance. We believe this should boost business prospects, credit supply, and demand in Greece, and increase investor appetite for purchasing problem assets, helping financial institutions to offload them from their balance sheets. In our view, the visible increase in domestic deposits, coupled with ongoing balance sheet cleanup and monetary developments, including access to the European Central Bank's targeted longer-term refinancing operations funding, has led to improvements in funding and liquidity metrics for Greek banks.

France

We have revised our economic risk trend for France to stable from negative. We now see reduced downside risks for French banks' asset quality and capitalization given unprecedented support to the local economy from domestic and European authorities, as well as COVID-19 vaccination progress.

We have also revised our industry risk score for France to '4' from '3', and our industry risk trend to stable from negative. We believe that the industry continues to face unyielding challenges to profitability and efficiencies, exacerbated by prolonged low interest rates, intense competition, revenue erosion, and high costs. Lower profitability can lead to instability and leave the sector more vulnerable when risk costs rise if banks do not generate adequate pricing on lending.

Germany

We have revised our BICRA for Germany to Group '3' from Group '2', our industry risk score to '4' from '3', and our industry risk trend to stable from negative. We believe the pandemic has exacerbated challenges facing the German banking sector, and that German banks are now less competitive relative to global peers due to slow progress improving revenue diversification, cost structures, and digitalization. We believe that German banks operate in a highly competitive and structurally overbanked banking market, with low gross margins, and that banks' progress in improving structural revenue diversification, cost bases, and digitalization is insufficient to keep up with peers. In our view, this has widened the sector's gap with leading banking systems, such as in the Nordics.

We have also revised our economic risk trend for Germany to stable from negative. We anticipate that German banks' asset quality and capitalization will likely remain robust, supported by the German economy's resilience amid the COVID-19 pandemic.

Ireland

We have revised our economic risk trend for Ireland to positive from stable. We estimate that the impact of credit losses and NPLs should be manageable for Irish banks. Irish banks entered the pandemic with healthy capitalizations and robust liquidity profiles, owing to residents' large savings. This allowed them to set aside large provisions in 2020 for future defaults but also led to reported losses. So far, we have not observed significant deterioration of asset quality, but we expect NPLs to rise over 2021-2022 as government support to households and businesses unwinds. However, we think last year's provisioning already provides a sufficient buffer for potential losses; therefore, we project new provisions to be much lower this year and next, at between 30 basis points (bps) and 45 bps. Lower credit provisions will support profitability improvements, but not enough for returns to reach pre-pandemic levels. Moreover, average systemwide returns in Ireland are likely to lag those of peers.

Kenya

We have revised our economic risk score for Kenya to '9' from '8', and our economic risk trend to stable from negative. This reflects the higher risk of wider economic imbalances stemming from Kenya's weaker external position. We expect the country's current account deficit to average 5.4% of GDP and external debt (net of liquid external assets) to average around 240% of current account receipts through 2024. What's more, the country's GDP growth and fiscal position have also been hit by the COVID-19 pandemic.

Netherlands

We have revised our economic risk trend for the Netherlands to stable from negative. In our view, the anticipated macroeconomic rebound and the ramp-up in vaccination, together with continuous government and European Central Bank support that we expect, will wind down only gradually, reducing the downside risks for Dutch banks' operating environment.

Poland

We have revised our economic risk trend for Poland to stable from negative. The pandemic-induced downturn hit the Polish economy less than most other European countries, and we expect Polish banks to manage the associated expected increase in NPLs, even after the government's support programs expire.

South Africa

We have revised our economic risk trend for South Africa to stable from negative. This reflects our view of the relative resilience of the South African banking sector to potential downside risks such as an uneven and protracted macroeconomic recovery. We see credit losses in the South African banking industry abating over the next 12-18 months after rising sharply in 2020 because of the pandemic. We expect credit losses will start decreasing, reaching about 1.7% in 2021, from 2.1% in 2020, but remain higher than their historical levels. However, we expect the NPL ratio will increase to about 5% of systemwide loans, reflecting the gradual end of regulatory forbearance measures.

Tunisia

We have revised our industry risk trend for Tunisia to negative from stable. In our view, Tunisian banks' already weak capitalization will further decline. We anticipate profitability will deteriorate significantly amid a highly competitive and fragmented operating environment, weak economic prospects, and rising credit losses. The banking system's current structure encourages price competition because banks compete for just a few blue-chip creditworthy names. We also note that the ratio of cash to accrued interest income dropped markedly for banks during 2020 because the pandemic led to a high amount of deferred loans and debt moratoriums. Furthermore, we acknowledge that banks' exposure to the sovereign reached 83.5% of their equity at year-end 2020. These factors further erode Tunisian banks' already insufficient capital buffers. We anticipate banks' risk-adjusted capital ratios will decline below 3% and regulatory capital ratios will approach the minimum requirements.

United Arab Emirates

We have revised our economic risk score for the United Arab Emirates to '6' from '5'. The sharp economic contraction in 2020--and prospects of a protracted recovery in 2021 and beyond--will have varying effects on rated UAE banks. We expect the residential real estate sector will remain under pressure for at least another year or two because of continuous oversupply, while demand-driven weaknesses will hamper the tourism, hospitality, and aviation sectors, as well as some trading sectors. We therefore expect UAE banks' asset-quality indicators will continue to deteriorate in the next 12-24 months, as regulatory forbearance measures are gradually lifted, and that credit losses will likely remain elevated. With the aforementioned change to the economic risk score, we also revised our economic risk trend to stable from negative.

We have also revised our industry risk trend for the UAE to stable from negative. When the pandemic started, the central bank (CBUAE) acted swiftly and extended a targeted economic support scheme to banks. This included, among other measures, a UAE dirham 50 billion zero-cost funding facility and the requirement to defer some corporate exposures to preserve these companies' productive capacity during stressed market conditions. The CBUAE subsequently asked banks to be transparent and disclose the amount of deferred lending on their books, grouping it into two categories: One with a minimal impact on the activity of the corporate and another with a material impact. At year-end 2020, about 14% of total loans were deferred, including 12% in Group 1 and 2% in Group 2 (based on the data disclosed by the top 10 banks). The swift action by the central bank and the transparency around the deferred exposures underpin our decision to revise the industry risk trend.

U.K.

We have revised our economic risk trend for the U.K. to stable from negative. We believe that economic risks affecting U.K. banks are receding as the recovery gathers pace and we now project a smoother transition away from fiscal support measures. Following large impairment charges in the first half of 2020, we believe that U.K. bank earnings could benefit from releases of loan loss provisions over the remainder of this year.

Uzbekistan

We have revised our economic risk trend for Uzbekistan to stable from negative. In 2020, Uzbekistan's economy expanded despite recessions in major trading partners and the COVID-19 outbreak. We believe that risks have largely stabilized for Uzbek banks and expect business growth to continue in 2021-2022, while risks for earnings prospects and funding sustainability are less acute.

Chart 2

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Chart 3

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Chart 4

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Table 3

Ratings Component Scores: Top 50 European Banks
Institution Operating company long-term ICR/outlook Anchor Business position Capital and earnings Risk position Funding and liquidity SACP/ GCP Type of support Number of notches support Additional factor adjustment
Austria
Erste Group Bank AG A/Stable bbb+ Strong Adequate Adequate Above Avg/Strong a None 0 0
Raiffeisen Bank International AG A-/Negative bbb+ Adequate Adequate Adequate Above Avg/Strong a- None 0 0
Belgium
Belfius Bank SA/NV A-/Stable a- Adequate Strong Moderate Avg/Adequate a- None 0 0
KBC Bank N.V. A+/Stable bbb+ Strong Strong Adequate Avg/Adequate a ALAC 1 0
Denmark
Danske Bank A/S A/Stable bbb+ Strong Strong Moderate Avg/Adequate a- ALAC 2 -1
Nykredit Realkredit A/S A+/Stable bbb+ Adequate Strong Adequate Avg/Adequate a- ALAC 2 0
Finland
Nordea Bank Abp AA-/Stable a- Strong Strong Adequate Avg/Adequate a+ ALAC 1 0
France
BNP Paribas S.A. A+/Stable bbb+ Very Strong Adequate Adequate Avg/Adequate a ALAC 1 0
BPCE S.A. A/Stable bbb+ Adequate Strong Adequate Avg/Adequate a- ALAC 1 0
Credit Mutuel Group A/Stable bbb+ Strong Strong Adequate Avg/Adequate a None 0 0
Credit Agricole S.A. A+/Stable bbb+ Strong Adequate Strong Avg/Adequate a ALAC 1 0
La Banque Postale A/Stable bbb+ Adequate Adequate Moderate Above Avg/Strong bbb+ Group 2 0
Societe Generale A/Stable bbb+ Adequate Adequate Adequate Avg/Adequate bbb+ ALAC 2 0
Germany
Commerzbank AG BBB+/Negative bbb+ Moderate Adequate Adequate Avg/Adequate bbb ALAC 1 0
Cooperative Banking Sector Germany A+/Stable bbb+ Strong Strong Adequate Above Avg/Strong a+ None 0 0
Deutsche Bank AG BBB+/Positive bbb+ Adequate Adequate Moderate Avg/Adequate bbb ALAC 2 -1
Sparkassen-Finanzgruppe Hessen-Thueringen A-/Stable bbb+ Adequate Strong Adequate Avg/Adequate a- None 0 0
Volkswagen Bank GmbH BBB+/Stable bbb+ Weak Very strong Adequate Avg/Adequate bbb+ None 0 0
Greece
Alpha Bank SA B+/Stable bb- Adequate Weak Adequate Avg/Adequate b+ None 0 0
Eurobank S.A. B+/Stable bb- Adequate Weak Adequate Avg/Adequate b+ None 0 0
Piraeus Bank S.A. B/Stable bb- Adequate Weak Moderate Avg/Adequate b None 0 0
Ireland
AIB Group§ BBB+/Positive bbb Adequate Strong Moderate Avg/Adequate bbb ALAC 1 0
Bank of Ireland Group PLC§ A-/Negative bbb Adequate Strong Moderate Avg/Adequate bbb ALAC 2 0
Israel
Bank Hapoalim B.M. A/Stable bbb+ Strong Strong Moderate Avg/Adequate a- Sov 1 0
Bank Leumi le-Israel B.M. A/Stable bbb+ Strong Strong Moderate Avg/Adequate a- Sov 1 0
Italy
Intesa Sanpaolo SpA BBB/Stable bbb- Strong Moderate Strong Avg/Adequate bbb None 0 0
Mediobanca SpA BBB/Stable bbb- Adequate Adequate Strong Avg/Adequate bbb None 0 0
Iccrea Banca SpA BB/Negative bbb- Adequate Moderate Weak Above Avg/Strong bb None 0 0
UniCredit SpA BBB/Stable bbb Strong Adequate Moderate Avg/Adequate bbb None 0 0
Netherlands
ABN AMRO Bank N.V. A/Stable bbb+ Moderate Strong Adequate Avg/Adequate bbb+ ALAC 2 0
Cooperatieve Rabobank U.A. A+/Stable bbb+ Strong Strong Adequate Avg/Adequate a ALAC 1 0
ING Bank N.V. A+/Stable bbb+ Strong Strong Adequate Avg/Adequate a ALAC 1 0
Norway
DNB Bank ASA AA-/Stable a- Strong Strong Adequate Avg/Adequate a+ ALAC 1 0
Spain
Banco Bilbao Vizcaya Argentaria S.A. A-/Stable bbb Strong Adequate Strong Avg/Adequate a- None 0 0
Banco de Sabadell S.A. BBB-/Stable bbb Moderate Adequate Adequate Avg/Adequate bbb- None 0 0
Banco Santander S.A. A/Stable bbb Very Strong Adequate Strong Avg/Adequate a None 0 0
CaixaBank S.A. BBB+/Stable bbb Strong Adequate Adequate Avg/Adequate bbb+ None 0 0
Sweden
Skandinaviska Enskilda Banken AB A+/Stable a- Adequate Strong Adequate Avg/Adequate a ALAC 1 0
Svenska Handelsbanken AB AA-/Stable a- Strong Strong Adequate Avg/Adequate a+ ALAC 1 0
Swedbank AB A+/Stable a- Strong Strong Moderate Avg/Adequate a ALAC 1 0
Switzerland
Credit Suisse Group AG§ A+/Negative a- Adequate Strong Moderate Avg/Adequate a- ALAC 2 0
UBS Group AG§ A+/Stable a- Strong Strong Moderate Avg/Adequate a ALAC 1 0
Raiffeisen Schweiz Genossenschaft A+/Stable a- Adequate Very Strong Adequate Avg/Adequate a+ None 0 0
Zuercher Kantonalbank AAA/Stable a- Strong Very Strong Adequate Avg/Strong aa- GRE 3 0
U.K.
Barclays PLC§ A/Positive bbb+ Adequate Strong Moderate Avg/Adequate bbb+ ALAC 2 0
HSBC Holdings PLC§ A+/Stable bbb+ Strong Adequate Strong Above Avg/Adequate a ALAC 1 0
Lloyds Banking Group PLC§ A+/Stable bbb+ Strong Adequate Adequate Avg/Adequate a- ALAC 2 0
Nationwide Building Society A/Positive bbb+ Adequate Strong Adequate Avg/Adequate a- ALAC 2 -1
The Royal Bank of Scotland Group PLC§ A/Stable bbb+ Adequate Adequate Adequate Avg/Adequate bbb+ ALAC 2 0
Standard Chartered PLC§ A/Stable bbb+ Adequate Strong Moderate Above Avg/Strong a- ALAC 1 0
Data as of July 13, 2021. In the "Type of Support" column, "None" includes some banks where ratings uplift because of support factors may be possible but none is currently included. For example, this column includes some systemically important banks where systemic importance results in no rating uplift. §Holding company; the rating reflects that on the main operating company. ICR--Issuer credit rating. GRE--Government-related entity. SACP--Stand-alone credit profile. Sys. Imp.--Systemically important. ALAC--Additional loss-absorbing capacity. GCP--Group credit profile. N/A--Not applicable. Sov--government support. Source: S&P Global Ratings.

Table 4

Ratings Component Scores: Top 25 CEEMEA Banks
Institution Operating company long-term ICR/outlook Anchor Business position Capital and earnings Risk position Funding and liquidity SACP/ GCP Type of support Number of notches support Additional factor adjustment
Bahrain
Ahli United Bank B.S.C. BBB/Positive bb+ Strong Adequate Adequate Above Avg/Strong bbb None 0 0
Arab Banking Corp. B.S.C. BBB-/WatchNeg bbb- Adequate Strong Adequate Below Avg/Adequate bbb- None 0 0
Jordan
Arab Bank PLC B+/Stable bb Strong Adequate Moderate Above Avg/Strong bb+ None 0 -3
Kuwait
National Bank of Kuwait S.A.K. A/Stable bbb Strong Strong Adequate Avg/Adequate a- Sov 1 0
Qatar
Qatar National Bank (Q.P.S.C.) A/Stable bbb- Strong Adequate Adequate Avg/Adequate bbb GRE 3 0
Qatar Islamic Bank (Q.P.S.C.) A-/Stable bbb- Adequate Strong Adequate Avg/Adequate bbb Sov 2 0
The Commercial Bank (P.S.Q.C.) BBB+/Stable bbb- Adequate Strong Weak Avg/Adequate bb+ Sov 3 0
Russia
VTB Bank JSC BBB-/Stable bb- Strong Weak Adequate Avg/Adequate bb- GRE 3 0
Gazprombank JSC BB+/Stable bb- Strong Weak Adequate Avg/Adequate bb- GRE 2 0
Alfa-Bank JSC BB+/Positive bb- Strong Adequate Strong Avg/Adequate bb+ None 0 0
Oman
BankMuscat S.A.O.G. B+/Stable bb Strong Adequate Moderate Avg/Adequate bb None 0 -2
Saudi Arabia
The Saudi National Bank A-/Stable bbb Strong Strong Adequate Avg/Adequate a- None 0 0
Al Rajhi Bank BBB+/Positive bbb Adequate Strong Adequate Avg/Adequate bbb+ None 0 0
Riyad Bank BBB+/Stable bbb Adequate Strong Adequate Avg/Adequate bbb+ None 0 0
Banque Saudi Fransi BBB+/Stable bbb Adequate Strong Moderate Avg/Adequate bbb Sov 1 0
Arab National Bank BBB+/Stable bbb Adequate Strong Moderate Avg/Adequate bbb Sov 1 0
The Saudi Investment Bank BBB/Stable bbb Moderate Strong Moderate Avg/Adequate bbb- Sov 1 0
Turkey
Turkiye Is Bankasi AS B+/Stable b+ Adequate Weak Adequate Avg/Adequate b+ None 0 0
United Arab Emirates
Mashreqbank A-/Stable bbb- Adequate Strong Adequate Avg/Adequate bbb Sov 2 0
First Abu Dhabi Bank P.J.S.C. AA-/Stable bbb- Strong Strong Strong Avg/Strong a- GRE 2 1
Abu Dhabi Commercial Bank PJSC A/Stable bbb- Strong Strong Adequate Avg/Adequate bbb+ GRE 2 0
Data as of July 13, 2021. In the "Type of Support" column, "None" includes some banks where ratings uplift because of support factors may be possible but none is currently included. For example, this column includes some systemically important banks where systemic importance results in no rating uplift. ICR--Issuer credit rating. GRE--Government-related entity. SACP--Stand-alone credit profile. Sys. Imp.--Systemically important. ALAC--Additional loss-absorbing capacity. GCP--Group credit profile. N/A--Not applicable. Sov--government support. Source: S&P Global Ratings

Recent Rating Actions: EMEA Banks

Table 5

Recent Rating Actions: EMEA Banks
Date of action Bank Country To From
09/07/2021 Al Baraka Banking Group B.S.C. Bahrain BB-/Negative/B BB-/Stable/B
07/07/2021 Bank URALSIB Russia NR B/Stable/B
01/07/2021 Aargauische Kantonalbank Switzerland AA/Positive/A-1+ AA/Stable/A-1+
01/07/2021 SB Alfa-Bank JSC Kazakhstan BB-/Positive/B BB-/Stable/B
01/07/2021 UniCredit Bank AO Russia BBB-/Stable/A-3 BBB-/Negative/A-3
01/07/2021 Standard Chartered Bank Nigeria Ltd. Nigeria B-/Stable/B
29/06/2021 Eksportfinans ASA Norway A-/Stable/A-2 BBB+/Positive/A-2
29/06/2021 Kaspi Bank JSC Kazakhstan BB-/Positive/B BB-/Stable/B
24/06/2021 Komercni Banka A.S. Czech Republic A/Stable/A-1 A/Negative/A-1
24/06/2021 Societe Generale France A/Stable/A-1 A/Negative/A-1
24/06/2021 RCI Banque France BBB-/Stable/A-3 BBB/Negative/A-2
24/06/2021 Oney Bank France BBB/Stable/A-2 BBB/Positive/A-2
24/06/2021 Credit Agricole S.A. France A+/Stable/A-1 A+/Negative/A-1
24/06/2021 Caisse Centrale du Credit Mutuel France A/Stable/A-1 A/Negative/A-1
24/06/2021 PSA Banque France France BBB+/Stable/A-2 BBB+/Negative/A-2
24/06/2021 BPCE France A/Stable/A-1 A+/Negative/A-1
24/06/2021 BNP Paribas France A+/Stable/A-1 A+/Negative/A-1
24/06/2021 UniCredit SpA Italy BBB/Stable/A-2 BBB/Negative/A-2
24/06/2021 Alior Bank S.A. Poland BB/Stable/B BB/Negative/B
24/06/2021 Allied Irish Banks PLC Ireland BBB+/Positive/A-2 BBB+/Negative/A-2
24/06/2021 AIB Group (U.K.) PLC United Kingdom BBB/Positive/A-2 BBB/Negative/A-2
24/06/2021 Van Lanschot Kempen Wealth Management N.V. Netherlands BBB+/Stable/A-2 BBB+/Negative/A-2
24/06/2021 NIBC Bank N.V. Netherlands BBB+/Stable/A-2 BBB+/Negative/A-2
24/06/2021 Cooperatieve Rabobank U.A. Netherlands A+/Stable/A-1 A+/Negative/A-1
24/06/2021 CRELAN S.A. Belgium BBB+/Stable/A-2 BBB+/Negative/A-2
24/06/2021 Volkswagen Bank GmbH Germany BBB+/Stable/A-2 A-/Negative/A-2
24/06/2021 Hamburg Commercial Bank AG Germany BBB/Developing/A-2 BBB/Negative/A-2
24/06/2021 Landesbank Hessen-Thueringen Girozentrale Germany A-/Stable/A-2 A/Negative/A-1
24/06/2021 Deutsche Pfandbriefbank AG Germany BBB+/Negative/A-2 A-/Negative/A-2
24/06/2021 DZ HYP AG Germany A+/Stable/A-1 AA-/Negative/A-1+
24/06/2021 DZ BANK AG Deutsche Zentral-Genossenschaftsbank Germany A+/Stable/A-1 AA-/Negative/A-1+
24/06/2021 DVB Bank SE Germany A+/Stable/A-1 AA-/Negative/A-1+
24/06/2021 Santander Consumer Bank AG Germany A-/Stable/A-2 A-/Negative/A-2
24/06/2021 Clydesdale Bank PLC United Kingdom A-/Stable/A-2 A-/Negative/A-2
24/06/2021 Virgin Money UK PLC United Kingdom BBB-/Stable/A-3 BBB-/Negative/A-3
24/06/2021 Nationwide Building Society United Kingdom A/Positive/A-1 A/Stable/A-1
24/06/2021 Royal Bank of Scotland plc (The) United Kingdom A/Stable/A-1 A/Negative/A-1
24/06/2021 National Westminster Bank Plc United Kingdom A/Stable/A-1 A/Negative/A-1
24/06/2021 Bank of Scotland PLC United Kingdom A+/Stable/A-1 A+/Negative/A-1
24/06/2021 Lloyds Bank PLC United Kingdom A+/Stable/A-1 A+/Negative/A-1
24/06/2021 Barclays Bank PLC United Kingdom A/Positive/A-1 A/Stable/A-1
24/06/2021 Santander UK PLC United Kingdom A/Stable/A-1 A/Negative/A-1
24/06/2021 Ibercaja Banco S.A. Spain BB+/Stable/B BB+/Negative/B
24/06/2021 Bankinter S.A. Spain BBB+/Stable/A-2 BBB+/Negative/A-2
24/06/2021 Banco Bilbao Vizcaya Argentaria S.A. Spain A-/Stable/A-2 A-/Negative/A-2
24/06/2021 Banco Santander S.A. Spain A/Stable/A-1 A/Negative/A-1
24/06/2021 Banco de Sabadell S.A. Spain BBB-/Stable/A-3 BBB/Negative/A-2
22/06/2021 Muganbank OJSC Azerbaijan B-/Stable/B CCC+/Stable/C
18/06/2021 My Money Bank France BBB-/Watch Dev/A-3 BBB-/Negative/A-3
16/06/2021 ATFBank JSC Kazakhstan NR B/Stable/B
16/06/2021 ATFBank JSC Kazakhstan B/Stable/B B-/Positive/B
16/06/2021 First Heartland Jusan Bank JSC Kazakhstan NR B/Stable/B
16/06/2021 First Heartland Jusan Bank JSC Kazakhstan B/Stable/B B/Negative/B
15/06/2021 Al Rajhi Bank Saudi Arabia BBB+/Positive/A-2 BBB+/Stable/A-2
10/06/2021 Commercial Bank (P.S.Q.C.) (The) Qatar BBB+/Stable/A-2 BBB+/Positive/A-2
10/06/2021 Ameriabank CJSC Armenia B+/Stable/B B+/Negative/B
08/06/2021 National Bank For Foreign Economic Activity Of The Republic Of Uzbekistan Uzbekistan BB-/Stable/B BB-/Negative/B
08/06/2021 KDB Bank Uzbekistan JSC Uzbekistan BB-/Stable/B BB-/Negative/B
08/06/2021 Ipoteka Bank JSCM Uzbekistan BB-/Stable/B BB-/Negative/B
26/05/2021 Nova Ljubljanska Banka D.D. Slovenia BBB-/Stable/A-3 BBB-/Negative/A-3
14/05/2021 Carrefour Banque France BBB/Negative/A-2 BBB+/Negative/A-2
10/05/2021 Banque de Tunisie et des Emirats Tunisia CCC+/Stable/C B-/Stable/B
10/05/2021 BH Bank Tunisia CCC+/Stable/C B-/Stable/B
10/05/2021 Arab Tunisian Bank Tunisia CCC+/Stable/C B-/Stable/B
29/04/2021 Liberty Bank JSC Georgia NR B/Stable/B
27/04/2021 Piraeus Bank S.A. Greece B/Stable/B B-/Stable/B
27/04/2021 National Bank of Greece S.A. Greece B+/Stable/B B/Stable/B
27/04/2021 Eurobank S.A Greece B+/Stable/B B/Stable/B
27/04/2021 Alpha Bank SA Greece B+/Stable/B B/Stable/B
26/04/2021 Cembra Money Bank AG Switzerland A-/Stable/A-2 A-/Negative/A-2
22/04/2021 Dexia Crediop SpA Italy BBB/Negative/A-2 BBB/Stable/A-2
19/04/2021 Alpha Bank SA Greece B/Stable/B
19/04/2021 Alpha Bank A.E. Greece NR B/Stable/B
15/04/2021 Alfa-Bank JSC Russia BB+/Positive/B BB+/Stable-/B
14/04/2021 The Commercial Bank (P.S.Q.C.) Qatar BBB+/Positive/A-2 BBB+/Stable/A-2
13/04/2021 UBI Banca SpA Italy NR BBB/Stable/A-2
08/04/2021 DVB Bank SE Germany AA-/Negative/A-1+ BBB/Positive/A-2
06/04/2021 Kapitalbank Uzbekistan B-/Positive/B B-/Stable/B
06/04/2021 Davr-bank Uzbekistan B/Stable/B B-/Stable/B
06/04/2021 Orient Finans Bank Uzbekistan B+/Stable/B B/Stable/B
01/04/2021 Samba Financial Group Saudi Arabia NR A-/Stable/A-2
01/04/2021 Samba Financial Group Saudi Arabia A-/Stable/A-2 BBB+/Positive/A-2
01/04/2021 Saudi National Bank (formerly The National Commercial Bank) Saudi Arabia A-/Stable/A-2 BBB+/Positive/A-2
Source: S&P Global Ratings.

This report does not constitute a rating action.

Primary Credit Analyst:Natalia Yalovskaya, London + 44 20 7176 3407;
natalia.yalovskaya@spglobal.com
Secondary Contacts:Elena Iparraguirre, Madrid + 34 91 389 6963;
elena.iparraguirre@spglobal.com
Mohamed Damak, Dubai + 97143727153;
mohamed.damak@spglobal.com
Additional Contact:Financial Institutions Ratings Europe;
FIG_Europe@spglobal.com

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