S&P has revised upwards its assessment of the bank’s capital and earnings, from moderate to adequate.
The bank’s risk assessment has been downgraded, from strong to adequate.
S&P says: “The negative outlook reflects the possibility of a negative rating action if, in our view, the weakening credit profile of Banco Santander jeopardizes SanUK’s funding prospects or poses a significant threat to its confidence-sensitive deposit base.
“The negative outlook also captures the potential contagion risk from the wider group, which could affect SanUK’s business position concerning decisions about how the business is run locally, or if the association with its Spanish parent puts the bank in a disadvantageous situation, compared with its U.K. peers. Any such event could lead us to lower the SACP for SanUK and so the ratings.”