Fitch cuts ratings of UBB, Eurobank EFG Bulgaria to B+.

By bne IntelliNews May 27, 2011
International credit rating agency Fitch has lowered the long-term issuer default ratings (IDR) of countrys third largest United Bulgarian Bank (UBB, the local subsidiary of the National Bank of Greece) and fifth largest Eurobank EFG Bulgaria (part of Greeces EFG Eurobank Ergasias S.A.) to B+ from BB and have placed them on rating watch negative, the Agency informed in a note on its website. The action follows a recent downgrade of their parents and reflects weaker ability of the above Greek banks to provide financial support to their subsidiaries in case of need. The IDRs of UBB and Eurobank EFG Bulgaria reflect the assessment of Fitch of their stand-alone strength, which has been undermined by significant asset quality deterioration. At the same time, the capital adequacy ratios have remained above requirements. The rating watch negative reflects Fitchs view that the local banks' credit portfolios will be closely linked to those of their parents. Any further deterioration at the parent banks will affect their support to the subsidiaries and the ability of the subsidiaries to raise funds from other sources. Also, Fitch informs that it has withdrawn the ratings of Eurobank EFG Bulgaria on demand of the local lender.

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