(The following statement was released by the rating agency)
LONDON, January 09 (Fitch) Fitch Ratings has affirmed Banque
Pictet & Cie SA's
(Banque Pictet) Long-term Issuer Default Rating (IDR) at 'AA-'
with a Stable
Outlook. Banque Pictet is the legal successor of Pictet & Cie. A
full list of
rating actions is at the end of this rating action commentary.
The affirmation follows a change in the legal structure of the
effective 1 January 2014 whereby Pictet has transformed its
partnership (Geneva-based Pictet & Cie) into a limited liability
anonyme; SA) and created an unlimited liability holding company
commandite par actions; Pictet & Cie Group SCA; Pictet SCA) as
sole owner of the
Pictet's current partners will remain the sole indirect owners
of Banque Pictet
through Pictet SCA. A supervisory board for Banque Pictet and a
(organe de controle) for Pictet SCA with independent members
Pictet SCA, which consolidates most of Pictet's non-bank and
(including Banque Pictet), will be supervised together with
financial entities on a consolidated basis by the Swiss banking
FINMA, which also separately supervises Banque Pictet.
KEY RATING DRIVERS - VIABILITY RATING (VR) AND IDRs
Banque Pictet SA's VR and IDRs reflect the bank's intrinsic
also factor in Fitch's assumptions that liquidity and capital
fungible among the various Pictet financial companies for the
future, despite the change in legal form.
Banque Pictet's ratings reflect the bank's core importance for
strong and profitable wealth management franchise, its low risk
balance sheet, solid funding and liquidity profile and solid
ratings also take into account regulatory pressure on the Swiss
industry as well as cyclical earnings pressure on the wealth
in general from the low interest rate environment, sluggish
and low risk appetite. However, due to their size,
diversification and low
overall risk profile, Pictet and Banque Pictet are, in Fitch's
placed than most peers to face these challenges.
The Stable Outlook on Banque Pictet's Long-term IDR reflects
that Banque Pictet will continue to generate stable and adequate
while avoiding significant operational or reputational losses.
RATING SENSITIVITIES - VR AND IDRs
Banque Pictet's VR and IDRs are sensitive to potentially
sizeable litigation or
operational losses in the context of the ever-tighter regulated
management industry although Fitch considers the occurrence of
unlikely. An increasing balance sheet risk appetite, also
or an inability to adjust its cost base to the currently
environment, could also put the ratings under pressure.
In the short term, Banque Pictet's ratings are sensitive to the
outcome of a US
Department of Justice (DoJ) inquiry into Pictet's US off-shore
Banque Pictet's ratings are based on Fitch's assumption that any
the DoJ will be of a manageable size and would be absorbed by
Banque Pictet's underlying profitability. Should the outcome be
expected by Fitch, affecting Banque Pictet's capitalisation, or
should the US
authorities take more drastic action against Pictet, this would
negative rating implications.
Moreover, Banque Pictet's ratings are also sensitive to any
declining degree of
integration into Pictet, which Fitch does not anticipate. While
from 1 January
2014, new creditors of Banque Pictet will no longer have direct
Pictet's partners, Fitch expects the partners to remain fully
Banque Pictet in the long term. Should Fitch conclude that the
appetite and risk exposure are no longer aligned with Pictet's
as a whole, then
this could be negative for Banque Pictet's ratings.
In addition, with the unlimited liability no longer in place at
the relative financial profiles of Pictet's operating entities
within the group
as well as the fungibility of capital and liquidity will become
important part of Fitch's analysis.
Given the already high ratings compared with peers and
challenges facing the
sector, ratings upside potential for Banque Pictet is limited.
KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR
The bank's Support Rating and SRF reflect Fitch's view that
for Banque Pictet, while possible, cannot be relied upon. Banque
for an affluent international client base and does not have a
franchise in Switzerland.
In case of need, support from within the Swiss private banking
sector and/or the
Swiss banking industry in general might be possible but has not
into Fitch's support-driven ratings. In addition, Banque Pictet
funding and capital support from Pictet's partners' private
wealth. Again, this
potential support has not been included in the ratings as such
support would be
difficult to quantify.
RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR
Given Banque Pictet's business model, any change in its Support
Rating and SRF
is highly unlikely.
Banque Pictet is Pictet SCA's main bank subsidiary,
consolidating the bulk of
its global private banking activities. Other sizeable
subsidiaries of Pictet SCA
include its Luxembourg-based private bank (Pictet & Cie (EU) SA)
and its asset
management activities (Pictet Asset Management Holding SA; PAM
The rating actions are as follows:
Banque Pictet & Cie SA (legal successor of Pictet & Cie)
Long-term IDR affirmed at 'AA-'; Outlook Stable
Short-term IDR affirmed at 'F1+'
Viability Rating affirmed at 'aa-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
+44 20 3530 1399
Fitch Ratings Limited
30 North Colonnade
London E14 5GN
Erwin van Lumich
+34 93 323 8403
Maria Jose Lockerbie
+44 20 3530 1083
Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153,
Additional information is available on www.fitchratings.com
Applicable criteria, 'Global Financial Institutions Rating
Criteria', dated 15
August 2012 and 'Rating FI Subsidiaries and Holding Companies'
dated 10 August
2012 are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Rating FI Subsidiaries and Holding Companies
Pictet & Cie
Lombard Odier & Cie
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