Fitch rates several subsidiaries of BBVA and Santander

Investing.com -- Fitch Ratings has taken various actions on the ratings of BBVA (BME:BBVA) Mexico, BBVA Colombia, BBVA Peru and Santander Mexico, subsidiaries of Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria, S.A. (BBVA) and Banco Santander (BME:SAN) S.A. (Santander). The rating actions follow recent changes in the parent companies’ ratings. On February 11, 2025, Fitch upgraded Santander’s Long-Term Issuer Default Rating (LT IDR) to ’A’ from ’A-’ and revised the outlook for BBVA’s LT IDR to Positive from Stable.

As a result, BBVA Mexico and BBVA Peru’s LT IDRs have been revised to Positive from Stable. BBVA Colombia’s Local and Foreign Currency LT IDR Outlooks remain Stable, constrained by the Country Ceiling and sovereign rating considerations. Fitch affirmed the LT IDRs of Santander Mexico and took action on its subordinated securities.

BBVA Mexico and BBVA Peru’s Foreign and Local Currency LT and Short-Term IDRs have been affirmed at ’BBB’ and ’F2’, respectively. Their Shareholder Support Ratings (SSR) remain at ’bbb’. The LT IDR outlook was revised to Positive from Stable, mirroring the action on BBVA. BBVA Mexico’s Viability Rating is at the same level as its SSR, but the bank’s IDRs are now driven by potential parent support due to the Positive Outlook on BBVA’s rating.

BBVA Colombia’s Foreign and Local Currency LT IDRs have been affirmed at ’BBB-’ and ’BBB’, respectively. The outlook for these ratings remains Stable. The bank’s IDRs reflect the support it would receive from its parent, BBVA, if required.

Santander Mexico’s Foreign and Local Currency LT and Short-Term IDRs have been affirmed at ’BBB+’ and ’F2’, respectively, and its SSR at ’bbb+’. The Outlook on the LT IDR is Stable. The bank’s IDRs are driven by its SSR that reflects Fitch’s assessment of the ability and propensity of its shareholder, Santander, to provide support if necessary.

Fitch also affirmed BBVA Mexico’s global scale debt ratings, senior unsecured and subordinated notes. The bank’s senior unsecured debt ratings align with the bank’s IDRs at ’BBB’. The subordinated debt issuances are three notches below the bank’s IDRs at ’BB’. Santander Mexico’s subordinated Tier 2 notes and AT1 securities were affirmed at ’BBB-’ and ’BB+’ respectively.

The ratings could be affected by various factors, including changes in the parent companies’ ratings, negative rating action on the Colombian sovereign’s ratings, and Fitch’s perception of a lower importance of Santander Mexico to its shareholder. Positive rating action could result from an upgrade of the parent companies’ ratings or improvement in Mexico’s sovereign ratings and Country Ceiling.

Fitch classified pre-paid expenses and other deferred assets as intangibles and deducted them from total equity for BBVA Mexico and Santander Mexico due to their low loss absorption capacity.

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