(Repeats story published late on Wednesday)
(The following statement was released by the rating agency)
-- We have revised our outlook on the 'A' long-term foreign
currency sovereign credit rating on Czech Republic to positive
from stable.
-- We regard Czech Republic-based Komercni Banka A.S. (KB)
as a core subsidiary of French banking group Societe Generale
(A+/Stable/A-1). However, according to our criteria, we cap the
long-term rating on KB to the long-term foreign currency rating
on Czech Republic because KB operates exclusively in Czech
Republic.
-- We are revising our outlook on KB to positive from
stable and affirming our 'A/A-1'ratings.
-- The positive outlook reflects that we could raise the
long-term rating on KB to 'A+', if the long-term foreign
currency sovereign credit rating on the Czech Republic is raised
to 'A+'.
Aug 11 - Standard & Poor's Ratings Services said today it
revised its outlook on Czech Republic-based bank Komercni Banka
A.S. <> (KB) to positive from stable. At the same time,
the 'A' long-term and 'A-1' short-term counterparty credit
ratings on KB were affirmed.
The rating actions follow yesterday's revision of the
outlook on the long-term foreign currency sovereign credit
rating on Czech Republic to positive from stable (see "Czech
Republic Outlook On Long-Term Foreign Currency Sovereign Rating
Revised To Positive; Ratings Affirmed," published on Aug. 10,
2010, on RatingsDirect).
KB is 60% owned by French bank Societe Generale (SocGen) and
is one of three commercial banks that dominate the Czech banking
market. We classify KB as a core subsidiary of SocGen, according
to our methodology. Despite this, we have not equalized the
ratings on KB with those on its parent, as is typically the
case.
"In accordance with our methodology, we consider it
appropriate to cap the credit ratings on KB to the foreign
currency sovereign credit ratings because KB operates
exclusively in the Czech market," said Standard & Poor's credit
analyst Pierre Gautier. "This is the main reason for the
one-notch gap between the ratings on KB and those on SocGen."
Our view of KB's core position reflects SocGen's
long-lasting presence and regularly reiterated interest in
Central and Eastern Europe, even in the middle of the economic
crisis. It is further reinforced by KB's strong retail foothold
in one of the wealthiest and economically stable countries in
the region and its solid business and financial profiles. In our
view, KB presents limited risks for SocGen, given what we see as
KB's strong funding profile, good operating performance, and
satisfactory capital position.
The ratings on KB currently incorporate two notches of
uplift above our assessment of its stand-alone credit profile
for potential support from the parent. This support could become
more important should the level of the foreign currency
sovereign rating cease to be a constraint.
"The outlook is positive because we would consider raising
the long-term counterparty credit rating on KB to 'A+',
therefore equalizing it with that on SocGen, if the long-term
foreign-currency sovereign credit rating on the Czech Republic
is raised to 'A+'," said Mr. Gautier. "However, to consider such
an action we would need to see KB retain its core position with
SocGen and that the ratings on SocGen either remain unchanged or
are raised."
"A downgrade of SocGen would eliminate the upside potential
for the ratings on KB," added Mr. Gautier.
RELATED CRITERIA AND RESEARCH
-- Group Methodology, April 22, 2009
-- FI Criteria: Bank Rating Analysis Methodology Profile,
March 18, 2004
-- Sovereign Risk For Financial Institutions, Feb. 16, 2004
Complete ratings information is available to RatingsDirect
subscribers on the Global Credit Portal at
www.globalcreditportal.com and RatingsDirect subscribers at
www.ratingsdirect.com. All ratings affected by this rating
action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in
the left column. Alternatively, call one of the following
Standard & Poor's numbers: Client Support Europe (44)
20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33)
1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46)
8-440-5914; or Moscow (7) 495-783-4011.
Primary Credit Analyst: Pierre Gautier, Frankfurt (49)
69-33-999-162;
pierre_gautier@standardandpoors.com
Secondary Credit Analyst: Simon Outin, Paris 33 1 44 20 7377;
simon_outin@standardandpoors.com
Additional Contact: Financial Institutions Ratings Europe;
FIG_Europe@standardandpoors.com
(New York Ratings Team, 646 223 6323;
edith.honan@thomsonreuters.com, Reuters Messaging:
edith.honan@thomsonreuters.com@reuters.net))
