S&P Affirms Bulgaria's UniCredit Bulbank BBB Rating

Business » FINANCE | July 30, 2009, Thursday // 18:26
Bulgaria: S&P Affirms Bulgaria's UniCredit Bulbank BBB Rating Bulgaria's biggest commercial bank is run by Italy's UniCredit. Photo by BGNES

International rating agency Standard and Poor's confirmed a Р’Р’Р’ rating of UniCredit Bulbank, a subsidiary of UniCredit Group.

This is currently the highest possible rating because according to the rules of Standard and Poor's the maximum achievable rating of a financial institution cannot surpass the rating of the country where it operates. Bulgaria also has a BBB/Negative/A-3 rating.

Standard and Poor's determined a long-term BBB rating and a short-term A-3 one. The outlook remains negative because Bulgaria has the same rating, states the official report by Standard and Poor's.

"UniCredit Bulbank is adequately positioned to withstand the current downturn due to ongoing parental support and its own development and enterprise risk management strategies, which are both more conservative and better developed than the corresponding strategies of its domestic peers", says Standard and Poor's report.

According to Standard and Poor's, Bulgarian banks face a significantly lower risk of foreign currency lending in comparison with many other East European countries, whose currencies sharply depreciated in late 2008-early 2009.

In 2009, the UniCredit Group provided EUR 1.2 B funding to the Bulgarian bank.

Last year Standard & Poor's lowered Bulgaria's long-term and short-term credit ratings to BBB and A-3 respectively.

The agency placed Bulgaria on its CreditWatch negative because of the country's increasing vulnerability during the ongoing global financial crisis.

According to Standard & Poor's, Bulgaria entered the global crunch with all symptoms of an overheated economy and with an increased risk of shrinking capital inflow.

Much of Bulgaria's financial system is dominated by Western European banks, which are affected by the financial crunch.

 

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Tags: Standard and Poor's, UniCredit Bulbank

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