Fitch Downgrades Three Intesa CEE Subsidiaries

Thu Mar 21, 2013 12:06pm EDT

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(The following statement was released by the rating agency) WARSAW/LONDON, March 21 (Fitch) Fitch Ratings has downgraded the Long-term Issuer Default Ratings (IDRs) of Slovenia's Banka Koper d.d. (BK) and Slovakia's Vseobecna Uverova Banka (VUB) to 'BBB' from 'BBB+'. Fitch has also downgraded Hungary's CIB Bank Zrt's (CIB) Long-term IDR to 'BBB-' from 'BBB'. The Outlooks on all three banks are Negative. A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS The downgrades of BK's, VUB's and CIB's support-driven IDRs reflect the recent downgrade of Intesa Sanpaolo's (Intesa) Long-term IDR to 'BBB+' from 'A-' (see 'Fitch Takes Rating Actions on Italian Banks Following Sovereign Downgrade' dated 18 March 2013 at www.fitchratings.com). The downgrade of CIB's Long-Term IDR and the two-notch difference between the ratings of CIB and Intesa reflects Fitch's view that, over the longer-term, there is increased uncertainty with respect to the strategic importance of the Hungarian subsidiary for the parent. Intesa's CEO recently commented that the bank is ready to take actions to further reduce its presence in the Hungarian market, where the operating and regulatory environment is challenging. At the same time, Fitch believes that Intesa's propensity to support CIB is likely to remain high, as reflected in CIB's investment grade rating. The affirmation of the three banks' Support Ratings at '2' reflects Fitch's opinion that Intesa will continue to have a strong propensity to support its subsidiaries in the Central and Eastern Europe (CEE) region. At the same time, Fitch believes that Intesa's primary focus for the foreseeable future will be the Italian market. The banks' Viability Ratings are not affected by these rating actions. RATING SENSITIVITIES The Negative Outlooks on the subsidiaries' Long-term IDRs mirror that on Intesa. The subsidiaries' Long-Term IDRs could be downgraded if the parent was further downgraded or if there is evidence of Intesa's reduced commitment to the CEE region. The ratings could stabilise at their current levels if there was a revision of the Outlook on Intesa to Stable. VUB's Outlook could also be revised to Stable if Fitch concludes after receipt of additional information from the bank that VUB's standalone profile warrants a Long-term IDR of 'BBB' with a Stable Outlook. The rating actions are as follows: CIB Long-term IDR downgraded to 'BBB-' from 'BBB'; Outlook Negative Short-term IDR downgraded to 'F3' from 'F2' Support Rating affirmed at '2' Viability Rating unaffected at 'b' BK Long-term IDR downgraded to 'BBB' from 'BBB+'; Outlook Negative Short-term IDR downgraded to 'F3' from 'F2' Support Rating affirmed at '2' Viability Rating unaffected at 'bb' VUB Long-term IDR downgraded to 'BBB' from 'BBB+'; Outlook Negative Short-term IDR downgraded to 'F3' from 'F2' Support Rating affirmed at '2' Contact: Primary Analyst (BK, CIB) Michal Bryks, ACCA Director +48 42 338 6293 Fitch Polska S.A. Krolewska 16, 00-103 Warsaw Primary Analyst (VUB) Agata Gryglewicz Analyst +48 42 338 6970 Fitch Polska S.A. Krolewska 16, 00-103 Warsaw Secondary Analyst (BK) Lindsey Liddell Director +44 203 530 1008 Secondary Analyst (CIB) Artur Szeski Senior Director +48 22 338 6292 Secondary Analyst (VUB) Levent Topcu Director +90 212 2847819 Committe Chairperson James Watson Managing Director +7 495 956 6657 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. BK and CIB's ratings were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. VUB's ratings were unsolicited and have been provided by Fitch as a service to investors. Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 15 August 2012 and 'Evaluating Corporate Governance', dated 12 December 2012 'Rating FI Subsidiaries and Holding Companies', dated 10 August 2012, 'Rating Financial Institutions Above the Sovereign', dated 11 December 2012 are available at www.fitchratings.com. Applicable Criteria and Related Research Global Financial Institutions Rating Criteria here Evaluating Corporate Governance here Rating FI Subsidiaries and Holding Companies here Rating Financial Institutions Above the Sovereign here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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