TEXT-S&P affirms and drops AB Ukio Bankas 'B/B' ratings

Thu Dec 20, 2012 7:23am EST

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(The following statement was released by the rating agency)

Dec 20 -

Rating Action

On Dec. 20, 2012, Standard & Poor's Ratings Services affirmed its 'B' long-term and 'B' short-term issuer credit ratings on Lithuania-based bank AB Ukio Bankas (Ukio). We subsequently withdrew these ratings at the issuer's request. The outlook was stable at the time of the withdrawal.

Rationale

At the time of the withdrawal, the ratings reflected our view of Ukio's commercial base in Lithuania, its "weak" business position under our criteria, due to its concentration on commercial real estate and the small and midsize enterprise segment in the Kaunas region; and its "moderate" capital and earnings, reflecting our recently lowered estimate of the bank's risk-adjusted capital ratio at about 6% at year-end 2013. The ratings also factored in Ukio's "weak" risk position, as a result of its recently high loss history and loan concentrations in commercial real estate. We viewed the bank's funding as "above average" and its liquidity as "adequate," deriving from a strong deposit funding position and ample cash and securities reserves.

Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit Portal, unless otherwise stated.

-- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

Ratings List

Ratings Affirmed; Ratings Withdrawn

Withdrawn To From

AB Ukio Bankas

Counterparty Credit Rating NR B/Stable/B B/Stable/B

Certificate Of Deposit NR B/B B/B

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