January 4, 2010
Bank BPH SA announces that Moody’s Investors Service has today confirmed Bank BPH’s Baa2 long-term local and foreign currency bank deposit ratings. The bank financial strength rating (BFSR) was upgraded to D, mapping to a baseline credit assessment (BCA) of Ba2, from a BFSR of D- (BCA of Ba3). All ratings now have a stable outlook. These rating actions conclude the review for possible upgrade of the bank’s ratings initiated by Moody’s on 21 August 2008. The Prime-2 short-term deposit ratings of Bank BPH were not affected by this rating action.
Today’s rating action follows the completion of the legal merger between Bank BPH and GE Money Bank Polska (GEMB), with General Electric Group (GE) assuming a larger shareholding of the combined group at 89%. This merger will promote the combined entity to the position of the 9th largest bank in Poland in terms of assets, with a stronger market position as a universal bank, a wider and more diversified customer base, solid capital ratios as well as more secure medium-term parent-backed funding.
More specifically, the merger took place on December 31, 2009 by transferring all of GEMB’s assets and liabilities to Bank BPH with a simultaneous increase in Bank BPH’s share capital by an issue of merger shares, which Bank BPH would issue to the shareholders of GEMB. As a result, the merged bank’s Tier 1 and capital adequacy rartios will compare favourably to peers.
As regards funding and liquidity, the merged entity will have an increased dependence on wholesale sources and in particular parental funding. This is due to the fact that GEMB has been principally funded by GE group, which is common to other GE subsidiaries in the region and in line with GE’s corporate policy. Despite BPH’s efforts over the past year in terms of expanding its customer deposit base, Moody’s observed some outflow of deposits in H1 2009 due to fierce competition in the market and aggressive pricing by other Polish entities. Therefore, the merged entity has one of the least favourable loan-to-deposit ratios compared with the rest of its Polish peer group. According to Moody’s, going forward, any efforts by the merged entity to acquire customer deposits and improve its loan-to-deposit ratio will need to be evaluated in light of the incremental cost of funding and the impact on its net interest margin.
However, core profitability of the combined entity has potential to improve over the medium term as a result of the merger on the back of higher-margin revenue structure of GEMB’s portfolio and a wider product offering to a diversified customer base. The combined loan book will have a more balanced structure compared to the lending exposures of Bank BPH prior to the merger. However, the portfolio will have a higher proportion of foreign exchange (FX) mortgages, which will represent around 50% of the total loan book. Although Moody’s expressed some concern regarding performance in this asset class during the Q1 2009 period of high volatility in exchange rates, the rating agency noted that the asset quality of FX mortgages remained resilient in the recent downturn. Nevertheless, Moody’s said that it expects some degree of deterioration in this segment of the portfolio in line with unemployment trends, although overall asset quality trends of the merged entity may stabilize in 2010 in line with general market trends in the country.
Finally, although the merged entity aims to expand its universal banking operations, which are focused on retail, SME and mid-caps, its future growth potential will be constrained by the availability of funding and competitive trends. Although there is some growth potential in these segments Moody’s considers that the current market conditions in Poland are not conducive to rapid growth and to gaining significant market shares in the short term. Overall, however, the rating agency said that the upgrade in the BFSR reflects its view that Bank BPH’s medium-term market position, has been strengthened by the merger, and that its risk profile and earnings potential are now comparable to those of the peer group in the D range.
In terms of long-term bank deposit ratings, the merged entity achieves a three-notch uplift which takes into account Moody’s assessment of a high probability of support from GE (rated Aa2/P-1), the ultimate parent. Moody’s does not incorporate any systemic support from Polish authorities due to the fact that the merged entity’s retail deposit franchise will remain very limited and is not considered as systemically important.
The stable outlook on the BFSR and short-term ratings reflects Moody’s expectation that – after taking account of substantial restructuring costs and higher provisioning charges that led Bank BPH to book relatively large losses in the first nine months of 2009 – the benefits of the merger will bring stability to the bank’s performance in 2010 and to profitability and counterbalance pressure from general market trends.
Moody’s last announcement on Bank BPH was on 31 July 2009, when the rating agency said it maintained on review for possible upgrade the bank’s D- BFSR and the Baa2 long-term bank deposit ratings. The ratings were placed on review for possible upgrade on 21 August 2008, after Moody’s downgraded the long-term foreign currency bank deposit rating of Bank BPH SA (BPH) to Baa2 from A3 and its bank financial strength rating (BFSR) to D- from C-.
The principal methodologies used in rating these issuers were "Bank Financial Strength Ratings: Global Methodology" (February 2007) and "Incorporation of Joint-Default Analysis into Moody’s Bank Ratings: A Refined Methodology" (March 2007). These are available on www.moodys.com in the Rating Methodologies subdirectory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies subdirectory on Moody’s website.
Headquartered in Krakow Poland, Bank BPH reported IFRS consolidated net loss of EUR14.5 million and total assets EUR3.6 billion after three quarters into 2009.
The following ratings were affected:
August 22, 2008
Bank BPH SA announces that on 21 August 2008 the Rating Agency Moody’s Investors Service downgraded the long-term foreign currency bank deposit rating of Bank BPH to Baa2 from A3 and its bank financial strength rating (BFSR) to D- from C-. The D- BFSR translates to a baseline credit assessment of Ba3. The short-term foreign currency bank deposit rating was confirmed at Prime-2. Moody’s also assigned local currency bank deposit ratings of Baa2/Prime-2 to Bank BPH. Both the BFSR and long-term bank deposit ratings were put under review for possible upgrade.
The above-mentioned rating actions follow the transfer of most of Bank BPH’s assets to Bank Pekao, which was concluded on 29 November 2007, and the subsequent approval by the Polish Financial Supervision Authority to exercise above 66% but not more than 75% voting rights at the Bank BPH General Meeting by General Electric Company (GE), in June 2008. On 17 June 2008 GE Money Bank (Polish subsidiary of GE) acquired from UniCredit the entity HoldCo77 B.V., owning 65.9% of Bank BPH shares and as a result of further public call increased its shareholding to 66%, on 17 July 2008. The downgrade of the BFSR to D- reflects that Bank BPH’s franchise has been significantly weakened as the scope of the bank’s business activities has narrowed and its overall size and market shares have substantially declined as a result of the transfer of the assets. In addition, according to Moody’s, potentially high initial expenses related to the bank’s plans for expansion and aggressive client acquisition may result in a fluctuating financial performance and risk profile. Moody’s also considers that the current operating environment is less favourable for rapid expansion than the bank had experienced in the past. However, the review for possible upgrade on the BFSR reflects Moody’s view of the financial and operational benefits that the full integration with GE Money Bank may bring to the merged entity. Moody’s also notes that Bank BPH maintains a well-recognised brand name in the market, well-developed systems, risk culture and experienced management.
The downgrade of the foreign currency bank deposit rating reflects Bank BPH’s lower BFSR as well as the probability of lower systemic support given the substantially weaker position within the Polish banking system. The review for possible upgrade on these ratings will focus on the stand-alone creditworthiness of the bank following the merger with GE Money Bank Poland as well as whether the resulting larger entity will result in a more systemically significant bank.
The BFSR was put on review for possible downgrade in April 2006 following the announcement that the Polish Commission for Banking Supervision had authorised UniCredito Italiano S.p.A to exercise directly and indirectly over 66% and not more than 75% of votes at the General Meeting of Bank BPH SA.
June 30, 2008
Fitch Ratings removed Bank BPH's Support rating from Rating Watch Negative (RWN) and affirmed it at '1'. Simultaneously, the rating was withdrawn.
Bank BPH's Support rating was placed on RWN on 20 November 2006, pending the sale of UniCredit 71.03% stake in the Bank after the Bank's future spin-off.
On 17 June 2008, in line with the preliminary agreement, GE Money Bank acquired the HoldCo77 B.V. (owning almost 66% of Bank BPH shares) from UniCredit and became the strategic investor of Bank BPH. In Fitch's view, General Electric Company (the ultimate parent of GE Money Bank) is likely to provide support to Bank BPH sufficient for a '1' Support rating.
October 5, 2007
Bank BPH SA (Bank BPH) announces that the Rating Agency Moody’s Investors has changed the uncertain review direction on the Bank’s C- financial strength (BFSR) to “review for possible downgrade”. This rating action results from the recent decision by the Polish Banking Supervision Commission to approve the spin-off and merger of a large part of Bank BPH SA's assets and businesses into Bank Pekao SA. This approval will also enable the acquisition by GE Money of the remainder of Bank BPH SA to move ahead, once the spin-off is completed.
With regards to the rating action related to Bank BPH SA's BFSR of C-, Moody's stated that in placing this rating on review for possible downgrade, it had duly considered the negative implications of the spin-off on Bank BPH SA, whose business scope and franchise will be significantly reduced after the transaction. Moody's said that the review will focus on the relative strength of the much smaller bank's franchise and financial fundamentals upon the completion of its acquisition by GE Money, taking into account any additional relevant information and strategic plans that may emerge by then in respect of the future development of Bank BPH SA.
Bank BPH SA's A3/P-2 Foreign Currency Deposit Ratings and BPH Finance Plc's secured MTN programme rating of A3 maintained on review with a direction uncertain. Moody's commented that the outcome of the review will depend on the level of the bank's BFSR and on Moody's assessment of support on behalf of the bank, following the closing of its acquisition by GE Money.
June 25, 2007
Bank BPH has been notified today by Fitch Ratings on maintaining the Bank’s Support rating of '1' on Rating Watch Negative.
Bank BPH's Support rating remains on Rating Watch Negative, pending the sale of UniCredito Italiano's ("UniCredit"; rated 'A+'/'F1'/Outlook Positive) planned 71.03% stake in the Bank as a result of the spin-off announced in November 2006.
In April 2007 GE Money was granted an exclusive right to negotiate the purchase of UniCredit’s stake in the spun-off Bank BPH. Nevertheless the required regulatory approval for the spin-off process has not yet been granted, and the binding purchase agreement has not been signed. In Fitch's view, GE Money is likely to provide support sufficient for a '1' Support rating. However, the Negative Watch status reflects the fact that the rating can only go down or stay the same, and not increase post sale. Until the final sale/purchase agreement between UniCredit and GE Money is in place, Bank BPH's Support rating will remain on the Rating Watch Negative, reflecting the risk that Bank BPH may ultimately be sold to another, possibly weaker buyer.
This rating is based on publicly available information.
April 27, 2007
Bank BPH SA (Bank BPH) announces that the Rating Agency Moody’s Investors Service issued the report stating that it had assigned a financial strength rating (BFSR) of C- on review with a direction uncertain to the Bank. This rating derives from the Moody’s expectation that the Bank's franchise will change and most probably weaken in the short-term, as the scope of Bank BPH’s business activities, its size and its market shares are expected to substantially contract, further to the merger of most of the Bank's assets with Bank Pekao SA in 2007, prior to the disposal of Bank BPH. That said, the ultimate BFSR of Bank BPH will also depend on who acquires Bank BPH as well the Bank's future strategy. As such, the review direction on the Bank's BFSR is uncertain. It should be noted that Bank BPH’s BFSR currently does not fully take into account improving trends in the Bank's risk positioning and in its financial fundamentals, nor the possibility that Bank BPH’s risk profile and financial fundamentals could improve, owing to its transformation into a retail bank prior to its disposal.
The foreign currency deposit ratings of Bank BPH SA is A3/P-2, on review with a direction uncertain.
November 29, 2006
Bank BPH announces that it has been notified that Standard & Poor’s Ratings Services today withdrew its 'BBBpi' public information rating on the Bank. The withdrawal follows the unveiling of the plans for upcoming integration of a very substantial part of Bank BPH into Bank Pekao.
November 20, 2006
Bank BPH announces that it has been notified that Fitch Ratings placed Bank’s Support rating of '1' on Rating Watch Negative.
This '1' Support rating reflects the potential support from its parent, UniCredito Italiano ("UniCredit"; rated 'A+'/'F1'/Outlook Positive), which holds a 71.03% stake in the bank. The Negative Rating Watch reflects the planned sale of the BPH legal entity, despite the planned transfer of the majority of liabilities to Bank Pekao, of which UniCredit is also a majority shareholder. Although a new owner may be able to provide support sufficient for a '1' Support rating, the Negative Watch status reflects the fact that the rating can only go down or stay the same, and not increase post sale.
The rating was based on publicly available information.
April 13, 2006
Bank BPH announces that the Rating Agency Moody’s Investors Service confirmed A3 long-term and P-2 short-term deposit ratings and A3 secured notes issued under the BPH Finance PLC secured MTN Programme and assigned “developing” outlooks to these ratings. Moody’s also placed on review for possible downgrade Bank BPH SA’s C- (stable) financial strength rating.
These actions follow on the recent announcement that the Polish Commission for Banking Supervision has authorized UniCredito Italiano (UCI) to exercise directly and indirectly over 66% and no more than 75% of votes at the General Meeting of Bank BPH SA as well as the announcements on the agreement reached between the Polish Ministry of Treasury and UCI regarding the merger of Bank BPH with Bank Pekao (including the disposal of 200 outlets and related banking services operating under the brand BPH to an independent third party).
Decision on assigning “developing” outlooks to Bank BPH deposit ratings reflects i. a. the limited information available on the merger process and on the future of Bank BPH. Moody’s stated that the review for possible downgrade of financial strength factors in the expectation that Bank BPH franchise will weaken from its current position, given the significant reduction of its distribution network. Moody’s review will focus on assessing (i) the scope of the operations housed under the Bank BPH brand name, (ii) the bank’s business plan, and (iii) the soundness of its financial fundamentals.
April 7, 2006
Bank BPH (BPH) announces that Fitch Ratings affirmed Support rating at “1”. According to Agency the Bank’s support rating is based on the extremely strong potential support available from its ultimate controlling shareholder, UniCredito Italiano (UCI) and follows the announcement of an agreement between the Polish government and UCI, which will allow the planned merger of BPH and Pekao to proceed.
The rating was based on publicly available information.
November 30, 2005
Bank BPH announces that Standard & Poor’s Rating Agency maintained the BBBpi rating on the Bank. This rating is based on strong shareholder support provided by Bank Austria Creditanstalt AG, the Bank’s successful reorganization, and improved customer franchise, which have led to an improving financial performance in a positive economic cycle. According to S&P creditworthiness is constrained by credit concerns relating to the fast-growing retail segment in which credit culture is untested, and where there is a hardening competitive environment and potential funding pressures.
The rating was based on publicly available information.
October 28, 2005
Bank BPH announces that it has been notified today that Fitch Ratings upgraded Support rating to “1” from “2” and removed the Bank from Rating Watch Positive. This upgrade is connected with successful completion of bank Unicredito Italiano bid for HVB (Bank BPH’s indirect majority shareholder) and reflects Fitch’s view of a higher probability of support from the new ultimate controlling shareholder.
The rating was based on publicly available information
September 28, 2005
Bank BPH announces that Moody’s Investors Service Ltd upgraded to C- with a stable outlook from D+ with a positive outlook the Bank’s financial strength rating (FSR). Long (A3) and short-term (P-2) deposit ratings are still on review for possible upgrade.
According to Moody's the FSR upgrade reflects the Bank's improving financial fundamentals on a stand-alone basis as well as its strengthening retail franchise. The rating agency commented that Bank BPH's risk-weighted recurring earnings power and efficiency indicators have continued to improve over the last 12 months and that the bank's capital base remains strong. While highlighting the Bank's improving revenue generation and overall risk profile, thanks largely to its continued retail and mortgage lending expansion, Moody's remarked, however, that Bank BPH was growing at a more aggressive pace than the market, notably in foreign currency mortgage loans, and that its revenue mix exhibited a greater reliance than most peers on more volatile trading income. Moody's also remarked that there was scope for Bank BPH to reduce its still high level of non-performing loans.
Going forward, Moody's stated that any improvement in Bank BPH's FSR on a stand-alone basis would be predicated by the continued successful realisation of its most recent strategic plan, by continued evidence of its control of operating costs and risks, and by further improvements in the Bank's underlying asset quality.
August 22, 2005
Bank BPH announces that it has been notified by Fitch Ratings Agency on its placing of Bank BPH’s Support Rating of “2” on Rating Watch Positive.
The rating was based on publicly available information.
June 14, 2005
Bank BPH announces that Rating Agency Moody’s placed on review for possible upgrade A3 (negative outlook) long-term deposit and P-2 short-term deposit ratings as well as A3 (negative outlook) secured medium-term notes issued by BPH Finance PLC.
D+ (positive outlook) financial strength rating was affirmed.
January 26, 2005
Bank BPH SA (Bank) announces that it has been notified that Moody’s Rating Agency has changed from stable to negative Bank’s long-term deposit rating outlook. Moody’s has affirmed other ratings: long and short-term deposit rating (A3, P-2) and financial strength (D+) with a positive outlook.
According to Moody’s the downgrade of Bank’s long-term deposit rating outlook is a result of Bank Austria Creditanstalt AG (direct owner of Bank’s 71.21% shares) and Bayerische Hypo- und Vereinsbank (indirect owner of 71.24% shares) ratings’ changes.
October 21, 2004
Bank BPH SA informs that it has been notified that Moody’s Rating Agency has changed the Bank’s financial strength rating outlook to positive from stable. All other ratings: long-term, short-term and financial strength have been unchanged and are the following: A3, P-2 and D+.
According to Moody’s the Bank’s D+ FSR with a positive outlook reflects its strong franchise and market position in retail including residential mortgage lending as well as in corporate and investment banking, its wide distribution outreach, its focused initiatives to strengthen its business lines and its successful restructuring. The positive outlook assigned to the Bank’s FSR also reflects its improving recurring earnings generation in 2004, the continued reduction of costs in spite of ongoing investments aimed at improving efficiency and distribution, as well as tightened risk management.
On the other hand, Moody’s noted that the Bank’s margins are under some pressure, its revenue base is vulnerable to more volatile market related income, non-performing assets are still high, even if reducing, and ongoing rapid expansion could cause asset quality and operational risk concerns in the future. Continued evidence of recurring revenue growth, asset quality improvements and the successful implementation of the Bank’s strategy should have positive rating implications for the Bank.
January 5, 2004
Bank Przemysłowo-Handlowy PBK SA informs it has been notified that the Capital Intelligence Rating Agency upgraded to BBB from BBB- the long-term foreign currency rating and changed the outlook from stable to positive. All other ratings: financial strength, short-term and support have been maintained at the previous level and are the following: BB+, A2 and 2. The upgrade of BPH PBK’s long-term foreign currency rating was a result of the Agency’s appreciation of Bank Austria Creditanstalt AG’s role in the Bank. The outlook was upgraded due to the Bank’s improved performance during first half of 2003.
The rating was prepared based on publicly available information.
November 24, 2003
BPH PBK has been notified that Fitch Ratings, the international rating agency, has withdrawn its Long-term, Short-term and Individual ratings of BPH PBK at the request of the Bank. On withdrawal, the ratings were as follows: Long-term - ‘BBB+’ with Positive Outlook, Short-term - ‘F2’ and Individual - ‘D’. At the same time, Fitch has affirmed BPH PBK’s Support rating of ‘2’, reflecting the backing provided to the bank by its ultimate main owner, Bayerische Hypo- und Vereinsbank (HVB), rated ‘A’. The liabilities of BPH PBK are covered by a Patronatserklaerung (declaration of backing) from HVB.
September 23, 2003
BPH PBK has been notified that Moody's Rating Agency upgraded to D+ from D the financial strength rating of the Bank.
The outlook for the bank's financial strength rating is stable.
The upgrade of BPH PBK's financial strength rating to D+ from D was a reflection of improving trends in the bank's financial fundamentals since end-2002.
May 20, 2003
BPH PBK was notified by the Rating Agency Moody's that it
changed to positive from stable the outlook for the D financial strength.
The Bank's deposits ratings and stable outlook were maintained. The Bank's
rating is as follow:
January 31, 2003
BPH PBK was notified by the Rating Agency Moody's that the ratings for the Bank assigned on 12.11.2003 have been maintained.
January 14, 2003
BPH PBK was notified by the Rating Agency Moody's that the ratings for the Bank assigned on 12.11.2003 have been maintained.
December 23, 2002
BPH PBK was notified by the Rating Agency Capital Intelligence that the following ratings for the Bank have been assigned:
December 5, 2002
BPH PBK was notified by the Rating Agency Fitch that the following ratings have been maintained:
November 22, 2002
BPH PBK was notified by the Rating Agency Standard and Poor's that the rating BBBpi has been mantained.
November 12, 2002
The Rating Agency Moody's notified BPH PBK that the following ratings have been maintained:
January 10, 2002
The Rating Agency Fitch notified BPH PBK SA that the following ratings for the merged bank BPH PBK have been maintained:
Ratings for joint BPH PBK are the same as the ones assigned separately for Bank Przemyslowo - Handlowy SA (BPH) and Powszechny Bank Kredytowy SA (PBK) in 2001.
BPH SA rating
October 11, 2001
BPH received the following rating from Standard and Poor's:
October 19, 2001
BPH received the following rating from Fitch Rating Agency:
November 28, 2001
BPH received the following rating from Moody's Investors Service Limited:
December 19, 2001
BPH received the following rating from Capital Intelligence:
PBK SA rating
October 19, 2001
PBK received the following rating from Fitch Rating Agency:
