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Fitch Places Poland's Bank Zachodni WBK’s Long and Short-Term IDRs on
Rating Watch Negative
Current report no. 60/2008
Fitch Ratings-London/Warsaw-28 November 2008: Fitch Ratings has today
placed Poland-based Bank Zachodni WBK's (BZ WBK) Long-term Issuer
Default Rating (IDR) of 'A+', and Short-term IDR of 'F1' on Rating Watch
Negative (RWN). At the same time, the agency has affirmed BZ WBK’s
Individual 'C' and Support '1' ratings.
The rating action reflects the placement of Allied Irish Banks’ (AIB -
'AA-' (AA minus)/RWN) Long-term IDR and Individual rating on RWN today,
AIB is BZ WBK's controlling shareholder. For more details, please see
the 28 November 2008 commentary “Fitch Places Five Irish Credit
Institutions on Rating Watch Negative” available on the agency’s public
website, www.fitchratings.com. BZ WBK's Long- and Short-term IDRs and
Support ratings are based on the extremely high potential for support
from AIB, in case of need.
"The affirmation of BZ WBK's Indivdual rating reflects the bank's
unchanged strong market position, solid balance sheet, profitability,
liquidity and adequate capitalisation," says Artur Szeski, Director with
Fitch's Financial Institutions Group. "Although its risk profile changed
slightly due to fast growth of consumer lending and increased exposure
to FX-denominated mortgages, the latter constitutes a still low 5% of
total lending and is expected to decline. Asset quality continued to
improve and is better than sector average. Nevertheless, the relatively
large exposure of BZ WBK to commercial and residential real estate
development remains a concern given the expected slowdown and price
correction of real estate markets. These exposures coupled with the
overall fast growth in lending could result in an increase of impairment
charges from the unsustainably low levels seen recently."
BZ WBK’s liquidity had tightened marginally over 2008, but remains
strong with a loan to deposit ratio of 86% at end-3Q08 compared with
around 116% for the sector. With funding coming mostly from customer
deposits (83% of non-equity funding at end-3Q08), the bank’s dependence
on wholesale markets is limited.
BZ WBK is Poland's fifth-largest bank with a 5% share of sector assets.
The bank operates 466 branches and had 9,717 full-time employees at
end-June 2008.
AIB is one of the largest banks in Ireland with EUR9.1bn of equity and
EUR183bn of assets at end-June 2008. AIB acquired a 60.1% stake in WBK
between 1995 and 1996. In 1999, AIB acquired 80% of Bank Zachodni SA
from the Polish State Treasury, and in 2001 merged it with WBK to create
BZ WBK, in which AIB currently has a 70.5% stake.
Contact: Artur Szeski, Warsaw, Tel: +48 22 338 6292; Mark Young, London,
+44 (0) 20 7417 4268.
Fitch's rating definitions and the terms of use of such ratings are
available on the agency's public site, www.fitchratings.com. Published
ratings, criteria and methodologies are available from this site, at all
times. Fitch's code of conduct, confidentiality, conflicts of interest,
affiliate firewall, compliance and other relevant policies and
procedures are also available from the 'Code of Conduct' section of this
site.
Legal basis:
§5 clause 1 item 26 of the Ordinance of the Ministry of Finance, dated
19 october 2005, with regard to current and periodic informations sent
by issuers of securities
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