Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRa) at ‘BBB-‘ with Stable Outlooks and Viability Ratings (VRs) at ‘b+’ for Romanian subsidiaries of Garanti Bank and ProCredit Bank, a press release informs.
“Garanti Bank Romania (GBR)’s IDRs and Support Rating are driven by our expectation that there is a high probability that extraordinary support would be forthcoming from its ultimate parent Banco Bilbao Vizcaya Argentaria (BBVA; A-/Stable). This view considers the ownership link, reputational considerations and GBR’s small size in relation to BBVA (below 1 percent of BBVA’s consolidated assets at end-2016) and its Turkish subsidiary. However, GBR’s strategic importance to the overall BBVA franchise and Romania’s role in the wider BBVA group are limited. As a result, we notch GBR’s Long-Term IDR three times down from BBVA’s,” Fitch analysts note.
They view GBR as a strategically important subsidiary of Garanti and without the three notch ‘floor’ to its Long-Term IDR from BBVA.
As regards ProCredit Bank (PCB) Romania, its IDRs and Support Rating are driven by a high probability of support it can expect to receive from its parent, ProCredit Holding AG & Co. KGaA (PCH, BBB/Stable).
“PCB Romania is notched down once from PCH based on the full ownership, the strategic importance of south-eastern Europe to PCH, the implication of the bank’s default for the parent, the strong integration with the parent and track record of capital and liquidity support. The Stable Outlook reflects that on the parent. At end-2016, PCB Romania accounted for around 5 percent of PCH’s consolidated assets,” Fitch also points out.