Fitch Downgrades Five Romanian Banks, Affirms Banca Transilvania

Fitch has lowered on Monday the sovereign ratings on Romania, citing vulnerabilities in the emerging markets, spurred by the global crisis and the country’s high current account deficits.

 

Thus, Romania’s long-term foreign currency IDR was downgraded to 'BB+' from 'BBB', with a negative outlook. Also, Fitch downgraded the long-term local currency IDR downgraded to 'BBB-' from 'BBB+', the short-term foreign currency IDR to 'B' from 'F3', and the Country Ceiling to 'BBB' from 'A-'.

 

“The Long-term IDRs and Support ratings of the five downgraded Romanian banks are driven by institutional support from their respective foreign parents and are constrained by Romania's 'BBB' Country Ceiling,” Fitch noted.

 

The Country Ceiling limits the extent to which potential support from the banks' foreign parents can be factored into their IDRs and Support ratings, the rating agency added.

 

Banca Comerciala Romana, or BCR, the largest Romanian lender by assets, was downgraded to ‘BBB’, as regards its Long-term foreign- and local currency IDRs, from ‘A-‘ previously, with a negative outlook. BCR’s short-term foreign currency was downgraded to 'F3' from 'F2', while the bank’s individual rating was affirmed by Fitch at 'C/D'. The support rating was also downgraded to '2' from '1'.

 

The second-largest Romanian bank, BRD-Groupe Societe Generale, part of French group Societe Generale, saw its long-term foreign currency IDR downgraded to 'BBB' from 'A-', with a negative outlook. The bank’s short-term foreign currency IDR was also downgraded to 'F3' from 'F2', while its Support rating was downgraded to '2' from '1'.

 

Fitch also downgraded Bancpost, a unit of Greek bank EFG Eurobank, whose long-term foreign currency IDR was downgraded to 'BBB' from 'A-' (A minus), with a negative outlook. Bancpost’s short-term foreign currency IDR was also downgraded to 'F3' from 'F2', while its Support rating was downgraded to '2' from '1'. The bank’s individual rating was affirmed at 'D'.

 

Long term foreign currency IDR of UniCredit Tiriac Bank was downgraded to 'BBB' from 'A-', with a negative outlook. The bank’s short-term foreign currency IDR was also downgraded to 'F3' from 'F2', while its Support rating was downgraded to '2' from '1'. The bank’s individual rating was affirmed at 'D'.

 

Banca Romaneasca’s long term term foreign currency IDR was downgraded to 'BBB' from 'BBB+', while its outlook has been changed to negative from stable. The bank’s short-term foreign currency IDR was also downgraded to 'F3' from 'F2'. Its Support rating was affirmed at '2' and the individual rating was affirmed at 'D'.

 

The rating action on domestically-owned private Romanian bank, Banca Transilvania, whose long term IDR is driven by its intrinsic strength and hence not constrained by Romania's 'BBB' Country Ceiling, is affirmed as ‘BB-‘, Fitch also noted. But the rating agency changed its outlook to stable from positive.

 

Banca Transilvania’s short-term foreign currency IDR was also affirmed at 'B'. Its Support rating was affirmed at '3', and the individual rating was affirmed at 'D'.