UBB with yet another improved assessment by Fitch and with the highest rating in Bulgaria
02 March 2021
The international rating agency Fitch Ratings has revised the outlook for United Bulgarian Bank (UBB) from “stable” to “positive” as at the same time it has affirmed the bank’s IDR rating at “A-” level. With this assessment UBB continues holding the highest rating in Bulgaria.
UBB’s rating has been upgraded up to the highest level for Bulgaria as early as in 2017 after its acquisition by the Belgian bank-assurance group KBC. The affirmation of UBB’s high assessment reflects the opinion of Fitch that UBB can rely on support, thanks to its synergy with the Belgian parent company KBC, which in its turn has “A” rating. КВС’s IDR rating has been used as an anchor for the IDR rating of UBB, since UBB has been categorized as a significant market player for the group and its minimum requirement for own funds and eligible liabilities (MREL) is based on KBC's single-point-of-entry (SPE) resolution strategy. The support for UBB has also been confirmed by the high level of operational and management integration within KBC Group.
„This yet another improvement of UBB’s long-term rating on the part of Fitch is an indisputable evidence of our successful performance. Over Y2020 and more tangibly than ever we took the burden of responsibility for ensuring a stable financial environment in Bulgaria, despite the extraordinary circumstances. The recently finalized transaction for the NN business in Bulgaria has only re-confirmed KBC’s ambition to develop Bulgaria as a core market of its and I am glad that this fact has also been taken into account in the rating agency’s assessment.“, commented Peter Andronov, Chief Executive Officer of UBB and Country Manager for KBC Group for Bulgaria.
The other arguments of the rating agency comprise the materially lower transfer and convertibility risks in mid-term perspective, as compared to long-term transfer and convertibility risks in Bulgaria, this country’s solid liquidity profile and the materially lower risks of imposing capital controls, given the planned admission of Bulgaria to the eurozone.
Detailed description of UBB’s ratings, confirmed by Fitch, is provided on the rating agenсy’s webpage here, while their summary presentation is the following: Long-term rating: 'A-' with positive outlook; short-term rating: 'F1'; Support Rating: '1'.