DBRS upgrades Ratings of Santander Totta
Portugal’s second largest clearing bank Santander Totta has been upgraded from A- to A by the fourth largest credit ratings agency worldwide – Toronto based DBRS Inc. It comes as the bank has announced a name change from Banco Santander Totta to Banco Santander Portugal. The upgrade decision was taken because the bank in Portugal has consolidated its position through the Santander group to become the second largest bank in the country. However, despite the name change, the bank will continue to operate independently with its own capital and liquidity.
Ratings agency DBRS Inc. has upgraded the long-term rating of Portuguese bank Banco Santander Totta S.A. following the upgrade of its holding, Banco Santander S.A.
The agency upgraded Totta’s Long-Term Issuer Rating to “A” from A (low), while its Short-Term Issuer Rating was confirmed at R-1 (low). The trend on all ratings remains Stable, in line with the rating of the Parent. Totta’s support assessment remains SA1. The change in rating follow DBRS’s upgrade of Santander’s senior long-term ratings by one notch to A (high), with a Stable trend.
At the same time the Santander franchise in Portugal will assume a new name not only reflecting its affiliation to Santander bank but also its Portugality – Banco Santander Portugal and is part of the international bank’s global brand renewal strategy.
“The bank will progressively take on this new name and image and in time it is expected that Banco Santander Totta will evolve into Banco Santander Portugal said the bank’s chairman António Vieira Monteiro.
The Santander rating rise was triggered after DBRS upgraded Spain by one notch to A, with Stable outlook on 6 April, 2018. Totta’s SA1 designation implies strong and predictable support from the holding and Totta’s rating will generally move in tandem with Santander’s long-term debt ratings. The SA1 designation considers Totta’s 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.
Positive rating pressure would likely be linked to improvement in Santander’s long-term debt ratings. Alternatively, a downgrade of Santander’s ratings would also likely negatively impact Totta’s ratings. Any indication of a reduction of support from the holding could impact DBRS’s support assessment, and potentially have a negative impact on Totta’s ratings.
Santander Totta SA is a commercial bank in Portugal owned by Santander that provides universal banking services to individuals, small- and medium-sized enterprises and large corporations. With the acquisition of Banco Popular Portugal S.A., DBRS sees Banco Santander Totta as further solidifying its position as the second largest bank in Portugal.
