Fitch assigns BBB- rating to Bulgarian Development Bank, negative outlook.

By bne IntelliNews March 4, 2010
International credit rating agency Fitch has assigned the state-run Bulgarian Development Bank (BDB) a long-term foreign-currency issuer default rating (IDR) of BBB-, a short-term foreign currency IDR of F3, individual rating D, Support Rating 2 and a Support Rating Floor of BBB-. The outlook of the long-term rating is negative. The IDR and the support rating reflect the high probability of sovereign support. The negative outlook is in line with the outlook of the sovereign rating. Fitch comments that it may change the long-term IDR if it changes its view on the willingness and ability for support, or a change in the banks role. The individual rating is based on the bank's exceptional current capitalisation of 84.7% at end-2009, its low refinancing risk, its adequate profitability, the banks small size and recent reorganisation, the limited track-record and the worsening asset quality. Bad loans accounted for 6.6% of total at end-2009, which is broadly in line with the 6.4% average of the banking sector but up from 1.5% at end-2008. This credit risk is mitigated by adequate coverage, guarantee facilities and high levels of collateral. Direct loans to small and medium-sized enterprises (SME) accounted for 34% of the bank's total earning assets while wholesale loans to commercial banks earmarked for SME on-lending accounted for a further 61% at end-2009. The state owns 99.99% of BDB.

Related Articles

EC urges Bulgaria to comply with EU rules on free movement of capital.

The EC has sent a reasoned opinion to Bulgaria over failure to comply with EU rules on the free movement of capital, the EC said on its website. The privatisation act in Bulgaria introduces ... more

Govt seeks delay of antitrust rules violation procedure against Bulgaria.

Bulgaria will be seeking an extension of the court procedure filed by the EC against the country over irregularities found in the assignment of digital broadcast spectrum, transport minister ... more

Bulgarians hold EUR 100mn in deposits in Cyprus.

Bulgarian individuals and companies hold EUR 100mn in Cypriot banks according to ECB data, BTA reported quoting Reuters. The largest EU depositors in the crisis-hit country are Greece with EUR ... more

Notice: Undefined index: subject_id in /var/www/html/application/controllers/IndexController.php on line 335
Dismiss