Fitch Ratings has revised Banca Transilvania S.A.’s (Transilvania) Outlook to Negative from Stable, while affirming its Long-Term Issuer Default Rating (IDR) at ‘BBB-‘ and the Viability Rating (VR) at ‘bbb-‘. A full list of rating actions is detailed below, according to Fitch Ratings.
The Negative Outlook on Transilvania’s Long-Term IDR follows Fitch’s revision of the Outlook on Romanian sovereign Long-Term IDR to Negative from Stable on 17 December 2024 (see: Fitch Revises Romania’s Outlook to Negative; Affirms at ‘BBB-‘ at www.fitchratings.com).
The Negative Outlook on the Romanian sovereign led to a negative revision of the operating environment (OE) outlook for Romanian banks. The OE is assessed at ‘bbb-‘ and capped at the sovereign rating. It will be revised lower should the sovereign be downgraded.
Fitch believes that considering the large exposure of Banca Transilvania to the Romanian sovereign (around 3.6x of common equity Tier 1 (CET1) at end-September 2024) downward pressure on the Romanian sovereign rating and the OE adds downside risks to Banca Transilvania’s business and risk profiles, capitalisation, funding and liquidity profile.
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