Standard & Poor's downgrades credit rating of No.1 lender Banca Comerciala Romana to 'BB+'Publish date: 30-10-2008
Standard & Poor's Ratings Services lowered the long-term credit rating on Romania's largest bank by assets Banca Comerciala Romana (BCR) to 'BB+' from 'BBB-' keeping the negative outlook.
Two days ago, S&P lowered Romania's long- and short-term foreign currency sovereign credit ratings to BB+ from BBB with a negative outlook, showing the balance of risks on the downside.
"As the largest bank in the country, BCR's performance and fundamentals are highly correlated with sovereign creditworthiness through, among other things, its role as the major financier of the local economy and its material holdings of government securities," said Standard & Poor's credit analyst Magar Kouyoumdjian.
Also, Romania's economy has been overheating on the high lending boom pinned at 50.5 percent in September, the rating agency stressed. Moreover, the current account deficit kept widening under the pressure of wage rise claims, in the background of global turmoil which shook off large international markets, S & P also showed.
The ratings on BCR, majority-owned by Austrian lender Erste, remain constrained by its relatively high level of adversely classified loans, increasing competition, particularly from foreign banks, pressurized margins and high economic and industry risks in the Romanian banking sector, the rating agency showed.
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