Fitch Downgrades Banca Romaneasca To B+

05.25.2011 By Florentina Dragu

Fitch Ratings Wednesday downgraded the long-term issuer default rating (IDR) of Banca Romaneasca, a subsidiary of the National Bank of Greece in Romania, following similar action taken against the parent bank.

Fitch also cut the ratings of two Bulgarian banks, United Bulgarian Bank, Eurobank EFG Bulgaria, subsidiaries of National Bank of Greece and EFG Eurobank Ergasias.

Fitch downgraded the IDRs of United Bulgarian Bank, Eurobank EFG Bulgaria and Banca Romaneasca S.A. to 'B+' from 'BB', while placing them on rating watch negative, the agency said in a statement.

Simultaneously, Fitch has withdrawn Eurobank EFG Bulgaria's ratings.

"Fitch will no longer have access to sufficient information to maintain the ratings due to EFGB's decision to not participate in the rating process," the statement noted.

Fitch said the downgrade of the Greek banking subsidiaries reflects the weaker ability of the parent banks to provide support to their subsidiaries in case of need.

"The subsidiaries' IDRs now reflect Fitch's assessment of their stand-alone strength, which has been undermined in each case by significant asset quality deterioration in the economic downturns in their home markets. However, total capital adequacy ratios of the banks have been maintained above regulatory requirements," Fitch said.

It added that any further marked deterioration at the parent banks could negatively affect the subsidiaries' stand-alone credit profiles, for example by diminishing their access to funding.


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