Fitch Ratings reaffirms Andbank’s rating at 
BBB, with a stable outlook

Fitch Ratings, the rating agency, has maintained all Andbank’s ratings: long-term at BBB and short-term at F3, with a stable outlook.

The agency points out that Andbank is better positioned than other Andorran institutions as it benefits from its international diversification, a balanced presence in Andorra and a strong capitalisation.

Escaldes-Engordany, 17 May 2019. Fitch Ratings, the rating agency, has maintained all Andbank’s ratings: long-term at BBB and short-term at F3, with a stable outlook.

The maintenance of the rating confirms Andbank’s leadership. Fitch Ratings points out that Andbank is the best positioned Andorran institution. The agency values its international diversification, the high quality of its assets, the strong capitalisation of the bank, as well as the resilience of its business model in revenue generation.

Andbank was the first Andorran bank to start out on an international trajectory, and this fact has allowed it to climb in a diversified and sustained manner, giving the group a privileged position in the Principality. The agency also points out the growth potential of its international units: Spain, Brazil, Luxembourg, the USA and Israel.

In 2018 the Andbank Group consolidated its leadership in turnover (23.47 billion euros). The agency points out that the group’s business model, focussed on private banking, has been able to maintain a good level of recurring earnings, generating a profit of 27.1 million euros, 12% more than estimated. At the end of 2018, Andbank demonstrated a return on tangible equity (ROTE) of 10.03%.

Furthermore, the confirmation is proof of the solid structure of the bank’s corporate governance, and the strict internal control and processes that are implemented throughout the group.

Fitch highlights the institution’s good level of capitalisation, as well as the quality and improvement of its assets and the good risk coverage ratio of the portfolio (coverage ratio of 104.09% and a non-performing loans ratio of 3.65%, 5.6% taking into account foreclosed assets).

In this regard, the agency underlines and assesses that Andbank’s capital ratios are very appropriate due to its risk profile, despite the fact that adaptation to the new regulatory regulations has affected industry profitability. The Group’s strength is reflected in its solvency ratio of 17% (TIER1 phase-in), much higher than the European average.