DBRS Confirms Santander Totta at BBB (high), Stable Trend, After Santander Confirmed at A, Stable

DBRS, Inc. (DBRS) has today confirmed the ratings of Banco Santander Totta S.A. (Totta or the Bank) following the confirmation of the ratings of its parent, Banco Santander S.A. (Santander or the Parent). DBRS has confirmed Totta’s Senior Unsecured Long-Term Debt & Deposit rating of BBB (high) and Short-Term Debt & Deposit rating at R-1 (low). The trend on all ratings remains Stable, in line with the rating of the Parent.

These rating actions follow DBRS’s confirmation of Santander’s Ratings at A, Stable, after the acquisition of Banco Popular Espanol (BPE, see DBRS Confirms Santander’s Ratings at A, Stable Following Acquisition of Banco Popular Espanol). DBRS maintains its SA1 support assessment for Totta. The SA1 designation implies strong and predictable support from the Parent. As a supported rating with an SA1 designation, Totta’s rating will generally move in tandem with Santander’s long-term debt ratings. DBRS notes that BPE also has a presence in Portugal, which is expected to complement Santander Totta’s position in this market and further expand Totta’s reach with SMEs.

The ratings of Totta reflect its important role as a core component of Santander’s international franchise and DBRS’s expectation that Santander has the willingness and ability to support Totta, if needed. The two notch differential between Totta’s long-term debt rating of BBB (high) and Santander’s long-term debt rating of A reflects the risks associated with supporting a bank subsidiary in foreign country, particularly a lower-rated country. DBRS rates the Republic of Portugal at BBB (low) with a Stable trend. DBRS views the increased risks associated with the lower rating of the Republic of Portugal as appropriately reflected in the two notch ratings differential between the Parent and Totta.

Notes:
All figures are in EUR unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (May 2017) and DBRS Criteria: Guarantees and Other Forms of Support (February 2017) which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Lisa Kwasnowski, Senior Vice President - Global FIG
Rating Committee Chair: Roger Lister, Managing Director, Chief Credit Officer, Global Financial Institutions Group and Sovereign Ratings
Initial Rating Date: July 18, 2012
Last Rating Date: March 7, 2017

The rated entity or its related entities did participate in the rating process. DBRS did have access to the accounts and other relevant internal documents of the rated entity or its related entities.