International agency Fitch began reconsidering its rating of Volksbank Slovensko on Tuesday, July 19, changing its status to Rating Watch Negative, which means that the rating might be downgraded within three to six months, the TASR newswire reported on Tuesday, citing a source at Fitch. The current long-term commitments rating of Volksbank Slovensko stands at BBB+, with its short-term rating at F2.
The agency decided to take the step after its parent institution Osterreichische Volksbanken announced that it had come to an agreement with Russia's Sberbank to sell its stake in Volksbank International (VBI), of which Volksbank Slovensko forms part. VBI owns 93 percent of the shares in Volksbank Slovensko, with Osterreichische Volksbanken holding 51 percent of VBI. Sberbank plans to buy out the stakes of all other VBI shareholders in order to gain full control of the group. It is expected that the transaction will take place by the end of this year. The purchase needs to be authorised by the regulatory authorities first, however.
According to Fitch, it is possible that Volksbank Slovensko could see its rating reduced to BBB- due to the level of support expected from the new parent bank. Volksbank Slovensko is financed mainly from client deposits, with financial resources from its parent bank reaching no more than 1 percent as of the end of 2010. Volksbank Slovensko did not seek more capital or liquidity from its parent bank during the global financial crisis.
Source: TASR
Compiled by Zuzana Vilikovská from press reports
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