Fitch Affirms Banque Gabonaise de Developpement at 'B+'; Stable Outlook

Thu Mar 13, 2014 11:48am EDT

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(The following statement was released by the rating agency) LONDON/PARIS, March 13 (Fitch) Fitch Ratings has affirmed Banque Gabonaise de Developpement's (BGD) Long-term Issuer Default Rating (IDR) at 'B+' with Stable Outlook, and its Short-term IDR at 'B'. Its Support Rating has been affirmed at '4' and Support Rating Floor (SFR) at 'B+'. At the same time, BGD's senior bond maturing in 2014 has been affirmed at 'B-/RR6'. KEY RATING DRIVERS - IDRS, SUPPORT RATING, SUPPORT RATING FLOOR AND SENIOR DEBT The bank's IDRs, Support Rating, Support Rating Floor and senior debt ratings reflect Fitch's opinion that the Gabonese state would support BGD, if required. Fitch believes that the Gabonese authorities have a high willingness to support BGD based on the bank's public mandate and ownership. Nevertheless, the probability of support is limited given the weak financial flexibility of the Gabonese state (BB-/Stable). BGD's Long-term IDR is one notch lower than Gabon's to reflect Fitch's view that support may not be provided on a timely basis. BGD's senior bond rating is notched down twice from the bank's IDR in line with Fitch's criteria for Recovery Rating. 'RR6' reflects poor recovery expectations in case of liquidation due to the bank's high leverage and low amount of liquid assets. At end-2013 the Gabonese state held a 52% direct stake in BGD as well as a 17% indirect stake through Gabonese Caisse des Depots et Consignations, the state's investment arm. BGD's business model, strategy and lending policies are, to a considerable degree, determined by the Gabonese state. BGD's board consists of government representatives to oversee that lending is directed to sectors considered to be important to the broader development of the Gabonese economy. This is because Gabon's fairly underdeveloped and concentrated economy and limited development opportunities have resulted in a shift in lending to consumers and SMEs in recent years rather than to large development projects. The state also provides much of BGD's funding, including deposits by state-owned corporates and the Gabonese Treasury, subsidies and additional capital to the bank. RATING SENSITIVITIES - IDRS, SUPPORT RATING, SUPPORT RATING FLOOR AND SENIOR DEBT BGD's IDRs, Support Rating and Support Rating Floor are sensitive to changes in Gabon's sovereign rating and/or in BGD's relation with or importance to the Gabonese state, as perceived by Fitch. However, a sovereign upgrade need not automatically result in an upgrade of the bank, whereas a sovereign downgrade may result in the same action on BGD, potentially narrowing the notching differential between the sovereign rating and the bank's Long-term IDR. The rating assigned to BGD's senior bond is sensitive to changes in BGD's Long-term IDR. It could also be positively impacted by an evolution of BGD's balance sheet resulting in a higher Recovery Rating. Contact: Primary Analyst Sonia Trabelsi Director +33 144 29 91 42 Fitch France SAS 60, rue de Monceau 75008 Paris Secondary Analyst Keranka Dimitrova Associate Director +44 20 3530 1223 Committee Chairperson Gordon Scott Managing Director + 44 20 3530 1075 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, Global Financial Institutions Rating Criteria, dated 31 January 2014 and Recovery Ratings for Financial Institutions, dated 24 September 2014 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Recovery Ratings for Financial Institutions here Additional Disclosure Solicitation Status 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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