(The following statement was released by the rating agency)
MILAN/PARIS/LONDON, February 06 (Fitch) Fitch Ratings has
Fimbank Plc's (FIM) Long-term Issuer Default Rating (IDR) at
'BB' with a Stable
Outlook. The Viability Rating (VR) has also been affirmed at
'bb'. A full list
of rating actions is provided at the end of this rating action
KEY RATING DRIVERS - IDRs and VR
The affirmation of FIM's VR and IDRs is based on the bank's
plans to increase
its capitalisation significantly under its new ownership
structure and on the
available, low-cost funding expected from its new majority
two elements compensate for the rating pressure arising from its
quality than peers and its volatile earnings.
The Stable Outlook reflects the capital already strengthened by
the KIPCO group,
FIM's new ultimate shareholder, and the additional capital which
the bank is
expected to receive by the KIPCO group in 2014. However, the new
structure, with one dominant shareholder, could result in some
around potential changes to both the management team and current
directions, although KIPCO has committed to develop the current
and strategy of FIM.
The ratings also reflect the bank's niche focus on trade
finance, with strong
relationships in a number of emerging markets, predominantly in
the Middle East
and North Africa, and its high asset concentration.
RATING SENSITIVITIES - IDRs and VR
FIM's ratings are sensitive to a material increase in its risk
could result from a change of strategy under its new ownership.
deterioration of asset quality, higher concentration of its
failure to generate more substantial and stable operating
profits could lead to
a downgrade. An upgrade is currently unlikely as the rating
takes into account expected improvements in capitalisation,
KEY RATING DRIVERS - Support Rating and Support Rating Floor
Although the bank would first look for support from the KIPCO
availability of such support cannot currently be ascertained by
Fitch and is
therefore not factored into the ratings.
The Support Rating of '5' and Support Rating Floor of 'No Floor'
reflect possible support from the Maltese authorities but which
in Fitch's view
cannot be relied upon.
RATING SENSITIVITIES - Support Rating and Support Rating Floor
Currently, the bank's Support Rating at '5' is sensitive to the
propensity of Malta to provide support.
Fitch will assess the new shareholder's ability and propensity
support to the bank on a timely basis as and when required,
which may result in
an upgrade of the Support Rating and withdrawal of the Support
The rating actions are as follows:
Long-term IDR: affirmed at 'BB'; Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
+39 02 87 90 87 225
Fitch Italia S.p.A.
V.lo S. Maria alla Porta 1
+39 02 879087 202
Olivia Perney Guillot
+ 33 1 44 29 91 74
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 31
January 2014, are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
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