Fitch to rate several small Romanian banks

Rating agency Fitch may grade several Romanian small banks, while necessary analyses could be funded by USAID, the US Agency for International Development.

“Discussions are being carried out, but are still at a preliminary stage” Libor Slechta, Fitch analyst for the Romanian banking system, told Ziarul Financiar.

Last November, rating agency Fitch took over Thomson BankWatch and, consequently, its activity of monitoring seven Romanian banks previously rated by Thomson BankWatch: Romanian Commercial Bank (BCR), Romanian Bank for Development (BRD)-Groupe Societe Generale, ?iriac Bank, Mindbank, BTR, Demirbank Romania and Banc Post.

“We will be visiting the banks for assessment between May and June,” Slechta said. “We are closely watching BCR and its privatisation prospective, given the high concentration of the Romanian banking system. On the other hand, we are waiting for Banca Agricola (Agricultural Bank) privatisation, whose success would matter a great deal,” the Fitch analyst stated.

He added that the economic growth resumption would positively influence the banks. “We expect the credits granted to the economy to increase. There are certainly many promising aspects. Romania now has new chances,” Libor Slechta said.

Last year, Banc Post, BCR, BRD-GSG, Demirbank Romania and Mindbank were granted LC-2 rating for short-term domestic currency denominated credits. Tiriac Bank was rated LC-3, probably due to the rumours regarding the bank’s financial position, spread last spring.

The ratings for short-term credits granted by the banks usually rank between LC-1, which is the best, and LC-4, which is the worst . BTR’s senior debt rating and short-term rating were lowered to C and LC-4 last November.

Only two other Romanian banks, BRD-Societe Generale and Demirbank Romania have been rated for their long-term credits. The ratings were initially identical with the country rating, B minus, but, last November, Fitch upgraded Romania’s ratings for the long-term hard and domestic currency denominated debts from B minus to B, with a Stable Outlook.