Fitch: Rating Prospects Still More Negative for European Banks Than Others

Mon Mar 3, 2014 10:44am EST

Related Topics

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Global Quarterly Bank Rating Trends 4Q13 here LONDON, March 03 (Fitch) Fitch Ratings says European bank rating prospects continue to remain more negative than those for banks in other parts of the world. Globally, negative Outlooks and Watches on bank ratings in developed markets still outweigh those in emerging markets, with 18.3% of developed market banks on Negative Outlook/Watch compared with 14.8% of emerging markets though the gap narrowed in 4Q13. Just over a quarter of Issuer Default Ratings (IDRs) assigned to banks operating in developed European countries were on Negative Outlook/Watch at end-2013, compared with just over a fifth of banks operating in emerging European countries. During 4Q13, European banks accounted for 83% of bank IDR downgrades globally and 88% of Viability Rating (VRs) downgrades. Globally, there were 34 actions on banks' IDRs in 4Q13, 18 downgrades and 16 upgrades. Of these, 14 were triggered by sovereign rating actions, all in emerging markets. The downgrade of Ukraine's sovereign rating affected nine bank ratings. Only eight IDR actions occurred in developed markets, in Italy, Netherlands, the UK and the US. VR upgrades outweighed downgrades during 4Q13. Of the 42 VR actions in the quarter, there were 25 upgrades and 17 downgrades. Over 70% of VR rating actions occurred in Europe, where there was an equal number of downgrade and upgrades (15.) Globally, about 80% of bank IDRs are on Stable Outlook. Banks in Asia/Australasia and Middle East/Africa continue to have the highest levels of Stable Outlooks. Bank IDRs continue to cluster at the 'BBB' level, with 32% of global bank ratings in this category, split roughly equally between developed and emerging markets. Globally, support-driven ratings make up 39% of IDRs assigned to banks by Fitch. The proportion of support-driven ratings is higher in emerging markets (46%) and less prominent in developed markets (31%). Fitch expects the changing dynamics of state support for banks globally to affect some support-driven ratings, notably in the developed markets where resolution legislation is most advanced. Fitch expects to communicate likely paths for its Support Rating Floors in 1Q14. Further details of quarterly global bank ratings are in the Special Report 'Global Bank Rating Trends 4Q13', available at www.fitchratings.com or by clicking on the link above. Contact: Janine Dow Senior Director +44 20 3530 1464 Fitch Ratings Limited 30 North Colonnade London E14 5GN Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com 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.

FILED UNDER: