Fitch upgrades CIB Bank's rating
The international credit rating agency announced in London that it has upgraded the Hungarian bank's long-term issuer rating by one notch from 'BBB' to 'BBB+'.
The outlook for the new rating is stable.
Fitch also upgraded CIB's Shareholder Support Rating (SSR) by one notch from 'bbb' to 'bbb+'.
In its rationale for Tuesday's upgrade of CIB's ratings, Fitch stated that the move was directly preceded by the upgrade of its Italian parent company, Intesa Sanpaolo.
The rating agency upgraded Intesa's long-term issuer rating last week from 'BBB' to 'A-' by two notches, following the upgrade of Italy's sovereign debt obligations from 'BBB' to 'BBB+'.
In its announcement regarding CIB's upgrade, Fitch highlighted that the Hungarian bank's new improved rating is one notch below Intesa's upgraded rating, which is
justified by country risk factors present in the Hungarian banking system.
The stable outlook for CIB's new rating reflects that Hungary's sovereign rating, also at 'BBB' investment grade, has a stable outlook as well, according to Fitch's London analysis.
The rating agency emphasises that the SSR rating is a key determinant of CIB Bank's issuer ratings, as this rating reflects Fitch's assessment that there is a high probability of support from Intesa if needed.
CIB Bank's SSR rating also reflects Fitch Ratings' assessment that a potential default of its Hungarian subsidiary would pose an extremely high reputational risk for Intesa.
According to Fitch, the high probability of support from Intesa is also underpinned by the Italian banking group's strategic focus on the Central and Eastern European market, which provides Intesa with an opportunity to diversify its business activities.
The rating agency also highlights the close operational integration between CIB and its Italian parent company.
Intesa has previously provided funding and capital support to CIB Bank when needed, and any additional support requirements would not materially affect the Italian bank's capacity to provide such assistance, given CIB Bank's small size, Fitch Ratings states in its London analysis of the Hungarian bank's upgrade.
Cover photo (for illustration purposes only): Portfolio
