March 28 (SeeNews) - Fitch Ratings said on Friday it has affirmed its long-term foreign currency issuer default rating (IDR) of Slovenia’s Banka Koper (BK) at BBB with a negative outlook.
The bank’s short-term foreign currency IDR is affirmed at F3, Fitch said in a statement.
The ratings agency also said in the statement:
“KEY RATING DRIVERS AND SENSITIVITIES: IDRS AND SUPPORT RATING
The affirmation of BK's Long-term IDR at 'BBB' and Support Rating at '2' reflects Fitch's view that Intesa Sanpaolo (Intesa; BBB+/Negative) will continue to have a strong propensity to support its subsidiaries in the Central and Eastern Europe (CEE) region, notwithstanding its primary focus on the Italian market.
The Negative Outlook on BK's Long-term IDR mirrors that on Intesa. The Long-term IDR could be downgraded if the parent is downgraded, or if there is evidence of a reduced commitment on the part of Intesa to the CEE region.
KEY RATING DRIVERS AND RATING SENSITIVITIES: VIABILITY RATING (VR)
The affirmation of BK's 'bb' VR reflects recent deposit growth, which has strengthened the bank's funding position, healthy liquidity, adequate capitalisation, and only moderate asset quality problems. BK has the highest VR among Fitch-rated banks in Slovenia reflecting its superior risk management framework, credit underwriting and corporate governance compared with peers, in part due to its ownership by Intesa.
However, there is still some downside risk to the VR in light of the weak and uncertain operating environment in Slovenia and significant single-name concentrations. BK's VR could be downgraded in the event of a material deterioration in asset quality that erodes capital. An upgrade of the VR is unlikely in the foreseeable future.
The rating actions are as follows:
Long-term foreign currency IDR: affirmed at 'BBB', Negative Outlook
Short-term foreign currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb' “
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