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Fitch Affirms BBVA Compass Bancshares, Inc's LT IDR at 'BBB'; Outlook Revised to Stable



  Fitch Affirms BBVA Compass Bancshares, Inc's LT IDR at 'BBB'; Outlook
  Revised to Stable

Business Wire

NEW YORK -- May 29, 2013

Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) for BBVA Compass
Bancshares, Inc. (CBSS) at 'BBB/F2' and the Viability Rating (VR) at 'BBB'.
The Rating Outlook is revised to Stable from Negative. This action follow's
Fitch's recent rating action on CBSS' parent company, Banco Bilbao Vizcaya
Argentaria (BBVA) on May 23, 2013. A full list of rating actions is at the end
of this rating action commentary.

KEY RATING DRIVERS - VRS, IDRS AND SENIOR DEBT

CBSS' VR, which reflects the company's intrinsic creditworthiness absent any
extraordinary support, was affirmed reflecting the company's improving
earnings and asset quality. Further, the rating and Outlook are supported by
CBSS' solid capital base and good liquidity profile. CBSS' Rating Outlook was
revised to Stable from Negative reflecting the overall improving credit
profile.

CBSS' recent earnings performance reflects a vast improvement over the losses
reported during the prior years, which were weighed down by large goodwill
impairment charges and elevated provision expenses. For the full year 2012,
CBSS reported a 74bps return on assets (ROA), and 68bps in 1Q'13. While this
included some benefit from releasing reserves, it nonetheless reflects an
improving overall credit profile. Asset quality ratios also continue to
improve in line with industry trends, while nonperforming asset levels remain
at very manageable levels. The capital profile remains strong, with a high
Tier 1 common ratio (under Basel III) of 11.55% at March 31, 2013. Further,
the liquidity profile continues to improve, reflecting industry trends of
strong deposit inflows and tempered loan growth.

Despite the improving profile, CBSS' ratings remain constrained by its
ownership, and the implications of macro-economic pressures in Spain on BBVA.
The parent company's Rating Outlook remains Negative, mirroring the Outlook on
Spain's sovereign rating. Given the improving standalone profile of CBSS, the
likelihood of downgrades, due either to company performance or downgrades of
BBVA or Spain, has decreased, as reflected in the Rating Outlook revision to
Stable.

RATING SENSITIVITIES -VR, IDRS AND SENIOR DEBT

Further ratings movement in BBVA's ratings will likely not impact CBSS' IDR,
since its VR will likely now be the anchor rating going forward. However,
CBSS' IDR could be adversely affected by a multi-notch downgrade of the
parent's rating. According to Fitch rating criteria, the potential uplift of
the subsidiary's VR from the parent's long-term IDR is usually limited to a
maximum of three notches. BBVA's Rating Outlook remains Negative (see the
press release titled 'Fitch Affirms Santander's BBVA's and CaixaBank's
Ratings', dated May 23, 2013) reflecting the close correlation between the
bank and the sovereign credit risk of Spain (rated LT IDR BBB, Outlook
Negative, by Fitch).

Absent a multi-notch downgrade in BBVA's ratings, CBSS' ratings are sensitive
to those drivers that would impact the VR, namely changes in capital, earnings
or asset quality. Fitch envisions more ratings upgrade potential than downward
pressure given the company's improving overall credit profile. CBSS' VR, and
consequently its IDR, could be upgraded with improving earnings performance,
combined with the continuation of moderating asset quality and the maintenance
of capital at appropriate levels.

In general, subsidiary banks can be vulnerable to a sharp deterioration in the
parent's credit profile. As a result, subsidiary VRs are not usually higher
than parent Long-Term IDRs. In the case of CBSS, there are several reasons why
this risk currently appears to be manageable, which therefore provides greater
long-term uplift in CBSS' VR relative to BBVA's long-term IDR. These reasons
include: limited direct exposure to BBVA or the Spanish market, an independent
franchise and operational infrastructure, and no reliance of CBSS on funding
from its parent. Fitch also expects that the U.S. regulators would not approve
capital distributions to the parent that would impair CBSS' credit profile.
CBSS has not upstreamed any capital to its parent over the past few years, and
has, in fact, been a beneficiary of capital injections from BBVA through the
crisis. However, Fitch expects CBSS will return capital in the future, though
it is assumed it will be in moderate amounts.

KEY RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING

CBSS is strategically important to, but not considered a core subsidiary of
BBVA by Fitch. CBSS' IDR reflects the higher of its support-driven IDR or VR.
CBSS' support-driven IDR has historically been notched one notch below at
'BBB' reflecting Fitch's view that CBBS is strategically important to BBVA,
though not core Since CBSS' support reflects institutional support, no support
rating floor is assigned. In the event Fitch's views CBSS as no longer
strategically important to BBVA, its support rating could be downgraded. In
the event this were to occur, it would likely have no impact on the company's
VR, and would likely not impact the IDR given Fitch's 'higher-of' approach in
assigning an IDR.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES

Subordinated debt and other hybrid securities issued by CBSS and by various
issuing vehicles are all notched down from CBSS' or its bank subsidiaries' VR
in accordance with Fitch's assessment of each instrument's respective
non-performance and relative loss severity risk profiles. Their ratings are
all primarily sensitive to any changes in the VRs of CBSS.

KEY RATING DRIVERS AND SENSITIVITIES - HOLDING COMPANY

CBSS' IDR and VR are equalized with those of Compass Bank, reflecting its role
as the bank holding company, which is mandated in the U.S. to act as a source
of strength for its bank subsidiaries. Should CBSS' holding company begin to
exhibit signs of weakness, or have inadequate cash flow coverage to meet
near-term obligations, there is the potential that Fitch could notch the
holding company IDR and VR from the ratings of Compass Bank.

The following ratings are affirmed:

Compass Bancshares, Inc.

--Long-term IDR at 'BBB'; Outlook Stable;

--VR at 'bbb';

--Support at '2';

--Short-term IDR at 'F2'.

Compass Bank

--Long-term IDR at 'BBB'; Outlook Stable;

--Short-term IDR at 'F2';

--VR at 'bbb';

--Support at '2';

--Long-term deposits at 'BBB+';

--Short-term deposits at 'F2';

--Senior unsecured at 'BBB';

--Subordinated debt at 'BBB-'.

TexasBanc Capital Trust I

--Preferred stock at 'BB-'

Additional information is available on www.fitchratings.com

Applicable Criteria and Related Research:

'Global Financial Institutions Rating Criteria (Aug. 15, 2012)';

'Rating FI Subsidiaries and Holding Companies (Aug. 10, 2012)'.

Applicable Criteria and Related Research:

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=792328

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
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DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
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PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS
OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
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ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
Primary Analyst
Julie Solar
Senior Director
+1-312-368-5472
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Secondary Analyst
Bain Rumohr
Associate Director
+1-312-368-3153
or
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Managing Director
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or
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Email: brian.bertsch@fitchratings.com
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