S&P affirms Ratings on Banco Bilbao Vizcaya Argentaria (BBVA); Notes 'Strong' Business Position

Standard & Poor's Ratings Services said it has affirmed its 'BB' long term and 'B' short term ratings on Paraguay- based Banco Bilbao Vizcaya Argentaria Paraguay S.A. (NYSE: BBVA) (BBVA Paraguay). The outlook remains stable.

The ratings on BBVA Paraguay reflect our view of the bank's "strong" business position among banks in Paraguay, its "weak" capital and earnings (based in our on our forecasted RAC ratio), its "adequate" risk position (with asset quality metrics in line with banking industry), "average" funding (mainly from deposits), and "adequate" liquidity. The stand-alone credit profile (SACP) is 'bb-'.

The 'BB' issuer credit rating on BBVA Paraguay incorporates notching from group support. We believe BBVA Paraguay is a "moderately strategic" subsidiary for its Spain-based parent, Banco Bilbao Vizcaya Argentaria S.A. (BBVA; BBB/Stable/A-2), which owns 99.99% of the bank's equity. BBVA Paraguay's strategy and operations are aligned with those of its parent. BBVA Paraguay's subsidiary status allows the credit rating on the bank to be one notch above its SACP.

The stable outlook incorporates our expectation that the bank will maintain its strong business position as one of the fourth largest bank in the industry, adequate asset quality metrics, a RAC ratio of about 4.4% for the next 12-18 months, and funding and liquidity levels in line with the industry average. We also incorporate our expectation for continued support from the group.

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