(The following statement was released by the rating agency)
PARIS/LONDON, March 12 (Fitch) Fitch Ratings says that The
NIBC Bank N.V.'s (NIBC, BBB-/Stable/F3) announced acquisition of
AG (Gallinat), a small German asset finance bank, is not
material to its
ratings. Closing of the transaction, subject to customary
is expected within the next two months.
The acquisition provides NIBC with improved funding
diversification in the
German market, and also expands its German presence with asset
"Mittlestand" companies. This complements the bank's corporate
in Germany, which it has provided for more than a decade, as
well as retail
services operated in the country since 2009. At end-2013, almost
one quarter of
NIBC's corporate loan book was to German counterparties.
The financial impact on NIBC is limited, in Fitch's view.
Execution risk is
manageable, and Gallinat's operating environment is familiar to
with a slightly different asset class. This acquisition
increases NIBC's total
assets by less than 3%, largely composed of financing and
funded by customer deposits. Fitch expects the acquisition to
have a small
negative impact on NIBC's solid capital ratios (Core Tier 1
ratio of 18.1% at
end-2013) and views funding needs for the purchase as immaterial
to the bank's
total liquidity. According to NIBC, the purchase price is
around EUR14m and at
a discount to Gallinat's net book value.
NIBC also published its 2013 results today, which were in line
expectations. While a recovery in net interest income is
beginning to come
through, recurring profitability remains modest. Net interest
margin is tight as
a result of NIBC's decision to maintain a large cash buffer
ahead of significant
debt maturities in 2014, but also given more structural
challenges, such as
higher funding costs in a 'post-crisis' environment.
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