Fitch affirms Kutxabank IDR at 'BBB'; Outlook negative

Fitch Ratings has today affirmed Basque-Country-based Kutxabank, S.A.'s Long-term Issuer Default Rating (IDR) of 'BBB', Short-term IDR of 'F3' and Viability Rating (VR) of 'bbb'.

The Outlook for the Long-term IDR is Negative, mirroring the sovereign rating of Spain. The agency has also affirmed Kutxabank's Support Rating of '3' and Support Rating Floor (SRF) of 'BB+'.

Fitch has simultaneously affirmed various unsecured debt issues of Kutxabank's 100%-owned bank subsidiary, CajaSur Banco S.A.U. (formerly, BBK Bank Cajasur, S.A.U.). CajaSur Banco's debt ratings are aligned with its parent.

Kutxabank's IDRs and senior debt ratings are driven by its stand-alone creditworthiness, as expressed by the VR. The affirmation of Kutxabank's VR reflects its leading franchise in the Basque Country, a region whose economy has performed better than most others in Spain. This operating environment supports the resilience ofearnings and asset quality.

The bank's large and stable retail funding base is also a positive driver and the VR also reflects management's sound track record and the bank's adequate loss-absorption capacity.