S&P Global Ratings upgrades Cajamar and Banco de Crédito Social Cooperativo credit rating to investment grade with stable outlook

The rating agency's solid solvency position and an improvement in profitability have been valued. 

S&P Global Ratings has upgraded Banco de Crédito Social Cooperativo and Cajamar Caja Rural's rating to investment grade (BBB-) with a stable outlook from (BB+), driven by Grupo Cooperativo Cajamar's solid solvency position, increased capitalization and an improvement in profitability. This investment grade credit rating is in addition to similar ratings given at the time by Fitch Ratings and DBRS Morningstar.

The rating agency has valued the strengthening of balance sheet of Cajamar and BCC and it points out that latest results, "with record profits up to the first nine months of 2024, mostly driven by higher net interest income and meaningfully lower credit provisions", have influenced positively on the rating upgrade. In fact, S&P Global Ratings notes that, "despite the expectation of lower interest rates ahead, we anticipate that Grupo Cooperativo Cajamar's bototom-line profits remain sound over the next 18 to 24 months". 

S&P Global Ratings notes that its ratings are supported by the "Grupo Cooperativo Cajamar resilient cooperative franchise, its large and granular retail deposit base, and its strong ties to the local communities in which it operates provides a funding advantage”.

The agency forecasts a higher capitalization of the Group, in particular, "that its risk-adjusted capital (RAC) ratio will stay comfortably above 10% over the next 18 to 24 months, reaching about 11% by end-2026".

At the same time, S&P Global Ratings has raised the short-term rating of Banco de Crédito Social Cooperativo and Cajamar to A-3 from B, their subordinated debt rating to BB from B+ and their preferred senior debt rating from BCC to BBB- from BB+.