International rating agency Fitch has confirmed the ratings for Garanti Bank Romania (GBR), a lender indirectly controlled by Spanish group Banco Bilbao Vizcaya Argentaria (BBVA), which started looking for a buyer last year.

Romania's biggest lender by assets, Banca Transilvania, is reportedly close to reaching a deal to acquire Garanti Bank Romania, the tenth-largest bank in the country, local media reported last July. BBVA was reportedly disappointed with the offers it received for GBR in the spring of 2020.

GBR's rating for the long-term debt remains at BB- with a negative outlook while the viability rating stays at BB-. This is a notch over the rating of its parent group, Turkiye Garanti Bankasi, Turkey's second-largest private lender.

The negative outlook on GBR's rating reflects the downside risks to its credit profile due to the COVID-19 pandemic, the rating agency motivated, Profit.ro reported.

The uncertainty over the depth of the damage to the Romanian economy drives Fitch's negative outlooks on the operating environment, asset quality, and earnings and profitability scores. In the rating agency's view, a potential downgrade of the operating environment (Romanian economy) assessment would pose further downside risks to the bank's viability rating.

Fitch expects a 5.4% contraction for the Romanian economy in 2020, followed by a gradual recovery, with the real GDP growing by 3.4% in 2021. A downside risk to the forecast is the resurgence of the pandemic, which increases the risk of further lockdowns.

Garanti BBVA Romania is 100% owned by Garanti BBVA Turkey, through a company from the Netherlands. The Turkish bank is also owned by Banco Bilbao Vizcaya Argentaria (BBVA), one of the largest financial groups in the world, with businesses mainly in Spain and Latin America.

andrei@romania-insider.com

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