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Spain's Caja de Ahorros del Mediterráneo outlook cut to negative

BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services has revised its outlook on Spain-based savings bank Caja de Ahorros del Mediterráneo (CAM) to negative from stable, reflecting the potential negative impact on CAM's financial profile, notably on asset quality and profitability.

The negative outlook reflects the possibility of a downgrade in the medium term if the tougher economic environment ahead results in meaningful pressure on asset quality and profitability, well above S&P's expectations.

S&P affirmed its 'A+/A-1' long and short-term counterparty credit ratings on the savings bank.

It said the ratings remain supported by CAM's strong position in its home market, sound strategic direction, high operating efficiency, and solid credit track record.

Negative rating factors include CAM's high exposure to Spanish real estate developers; modest core solvency, which the agency expects will improve over the medium term, and heavy reliance on wholesale funding.

The ratings agency added that the outlook could be revised back to stable if CAM succeeds in preserving problem loans at manageable levels as the economy slows and maintains overall sound financial performance. TFN.newsdesk@thomson.com kkb/pmi
http://www.hemscott.com/news/latest-news/item.do?newsId=61518964238059
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