S&P lowers the outlook for BBVA to negative but maintains the rating

Renta 4 | The ratings agency S&P has maintained the rating of BBVA, but has lowered the Outlook from stable to negative because of its exposure to Turkey through Garanti, of which BBVA controls 49.85% and which accounts for 15% of the Group´s profits.

The Turkish bank´s rating has been lowered to B+ from BB- and retains a stable outlook after the lowering of Turkey´s country rating on 17 August, together with five other Turkish banks due to the depreciation of the Lira (40% in 2018 against the dollar), geopolitical tensions and high inflation (over 15%).

All this, in a context of rising interest rates in the US, will have a negative impact on economic growth and, consequently, in the quality indicators of the bank´s assets. Moreover, the ratings agency points out the deterioration of the institutional framework and the lack of transparency in the sector.

Negative news, but of limited impact and partly expected after the recent downgrading of Turkey.

Objective Price 7.18 euros/share. Maintain.