Fitch affirms Romania’s Unicredit Tiriac Bank and Banca Transilvania ratings

Fitch Ratings recently affirmed UniCredit Tiriac Bank’s (UCTB) and Banca Transilvania’s (BT) ratings.

Banca Transilvania’s long-term foreign currency IDR was affirmed at ‘BB-‘ with stable outlook, while the short-term foreign currency IDR was affirmed at ‘B’. Fitch affirmed the support rating at ‘3’ and the viability rating at ‘bb-‘. The support rating floor was also affirmed at ‘BB-‘.

“The viability rating reflects the bank’s strong deposit funding base, stable profitability and internal capital generation, low concentrations in the loan book, a lower share of foreign-currency lending than at peers and reasonable coverage of impaired loans with accounting provisions and high coverage of 90 days past due loans,” according to Fitch.

The support rating and support rating floor reflect the bank’s systemic importance as the largest private bank with no majority shareholder and with a nationwide franchise in Romania, as a result of which Fitch believes there is a moderate likelihood that the Romanian authorities would provide support if necessary, reads the agency’s statement.

In the case of Unicredit Tiriac Bank, the long-term foreign currency IDR was affirmed at ‘BBB‘ with outlook negative and the short-term foreign currency IDR was affirmed at ‘F3’. The ratings agency also affirmed the support rating at ‘2’ and the viability rating at ‘bb-‘.

UCTB’s viability rating reflects the pressure on its profitability from elevated loan impairment charges (LICs), high impaired loan ratios (21.9 percent at end-2013), and moderate capital levels (FCC ratio of 14.7 percent at end-2013) in light also of the bank’s moderate coverage of impaired loans with accounting provisions (46 percent at end-2013),” according to Fitch.

Irina Popescu, [email protected]

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