The upgrade concludes the review for upgrade placed on Bankia’s ratings following the announcement of the merger with Caixabank.

The rating action follows the announcement by Bankia and Caixabank that the boards of the two banks have reached an agreement and aim to merge the two entities.

While the deterioration in the operating environment will weigh on profitability in 2020, Scope expects cost of risk to remain manageable, due to the bank's conservative loan book.

In Scope Ratings’ assessment, Bankia is on the right track to exceed its risk reduction targets but the persistence of low interest rates weighs on the revenue outlook.