The ratings agency takes a positive view of the increase in profitability The ample and well-managed liquidity was another favourable point in the assessment Fitch Ratings affirms Creand Crèdit Andorrà’s long-term rating at ‘BBB-’ with a stable outlook. The ratings agency highlighted the bank’s leading domestic franchise in Andorra, strengthened by its acquisition of Vall Banc. It also noted the “improved operating profit supported by higher interest rates, cost synergies from the integration of Vall Banc and reversal of credit provisions”. The latter is a direct result of the positive evolution of non-performing loans. Moreover, Fitch expects the bank to maintain its business growth, which will enable it to continue boosting revenue generation to offset future interest rate cuts. Fitch further noted the bank’s adequate capitalisation “with satisfactory buffers over their regulatory requirements”, as well as its stable and well-managed liquidity. The ratings agency also mentioned the bank’s support for the country’s economy and business fabric, which translates into the highest lending ratios in the market. Fitch’s commentary reiterates an issue that it highlighted in its last assessment, namely the ample structural liquidity of the business model, especially in private banking, which entails, among other things, the possibility of having a large portfolio of high quality fixed income investments. The assessment also positively considers the international business, noting increased profitability mainly in Luxembourg, Spain, and Miami, “despite intense competitive pressures”. Fitch also highlights the bank’s operating environment, which reflects the sound credit profile of the Principality of Andorra. The report also sets out the agency’s opinion regarding the country’s economy, “which is expected to grow by 1.5% overall during 2024-2025”, and about the association agreement with the European Union, which, if approved, could represent further integration of Andorra’s banking system into the EU. Xavier Cornella, CEO of Creand, stated, “This assessment confirms our leadership in the country and endorses our business strategy, which has led to growth in all the territories in which we operate. We are upholding our strong support for Andorra’s economy while continually improving the services we offer our clients”.
