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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Related Issuers
Rating Action:

Moody's changes rating outlook on Getin Noble Bank S.A. to negative

02 Nov 2016

London, 02 November 2016 -- Moody's Investors Service has today changed the outlook to negative from stable and affirmed the Ba2 long-term local and foreign-currency deposit ratings of Getin Noble Bank S.A. (GNB). Concurrently, the rating agency has affirmed the bank's long-term Ba1(cr) Counterparty Risk Assessment (CRA) and b1 baseline credit assessment (BCA) and adjusted BCA.

The bank's short-term Not-Prime deposit ratings and Not-Prime(cr) CRA are unaffected by today's rating action.

The full list of the affected ratings and rating inputs can be found at the end of this press release.

RATINGS RATIONALE

The affirmation of GNB's Ba2 deposit ratings and change of the outlook to negative from stable reflects Moody's assessment of rising downward pressure on the bank's standalone b1 BCA due to its weakened loss absorption capacity - problem loans as a percentage of loan loss reserves and Moody's key capital metric tangible common equity (TCE) increased to 95% as of H1 2016 from 81% in December 2014. GNB's deposit ratings continue to receive a two-notch rating uplift from Moody's Advanced Loss-Given-Failure (LGF) analysis.

GNB's asset quality remains weak at 13.8% of non-performing loan (NPL, includes defaulted and other impaired loans) ratio of as of June 2016, albeit little changed from 13.1% as of December 2014. However, the coverage of these NPLs by loan loss reserves declined to a low level of 36.2% from 54.1% as of the same dates. As such, GNB's coverage compares unfavourably with the average of 66.7% for Moody's-rated banks in Poland as of December 2015. The reduction of the NPL coverage was partly due to the sale and write-off a some of the older problem loans with higher loan loss reserves. According to the bank, as of December 2015 about half of the total housing non-performing loans became delinquent by more than 90 days within the past one year, witnessing accelerated asset quality deterioration against the general trend in the Polish banking system that benefits from the benign operating environment in the country. Further, such high share of new NPLs will likely require higher provisioning over the next 12 to 18 months.

GNB's profitability and therefore ability to absorb additional provisions needs through earnings will remain challenged. Despite lower funding cost, one-off income from the sale of shares in VISA Europe and exemption from the bank tax from Q2 2016 onwards, the bank reported a small net loss of PLN15.9 million (EUR3.6 million) in H1 2016 vs. a net income of PLN208.8 (EUR52.5 million) a year earlier, driven by lower fee generation and income from subsidiaries, as well as a material rise in loan loss provisions. Given its profitability challenges, GNB is admitted under a special program of the Polish regulator for restoring loss-making banks' long-term profitability which temporarily exempts the bank from paying the bank tax. Measures taken under the program, along with the significant savings from the exemption of the bank tax will likely benefit GNB's operating profitability over the next 12 to 18 months. However, the bank's net income remains vulnerable to higher loan loss provisions as well as to potential significant costs arising from policy measures on Swiss Franc (CHF) mortgages. GNB has one of the largest exposures to CHF mortgages in Poland, which accounted for 28% of the bank's total loans as of June 2016.

More positively, GNB's CET1 ratio improved materially to 12.3% as of June 2016 from 9.7% as of December 2014 owing mainly to deleveraging and associated lower risk weighted assets as well as gains from sale of some subsidiaries, thereby supporting its b1 BCA. However, it is only modestly above the regulatory recommended minimum level of 11.76%, which includes several buffers such as capital conservation buffer, foreign-currency mortgage risk buffer and O-SII buffer, leaving limited risk-absorption buffers.

-- WHAT COULD MOVE THE RATINGS UP/DOWN

A significant reduction in the level of NPLs coupled with improving profitability and capitalisation will likely lead to the stabilisation of the ratings outlook.

A material deterioration in the bank's loan book and/or large costs arising from the implementation of policy measures on CHF mortgages may result in ratings downgrade.

Furthermore, changes in the bank's liability structure may modify the amount of uplift provided by Moody's Advanced LGF analysis and lead to a higher or lower notching from the bank's adjusted BCA, thereby affecting the deposit ratings and CRA.

LIST OF AFFECTED CREDIT RATINGS

Issuer: Getin Noble Bank S.A.

Affirmations:

....LT Bank Deposits (Local & Foreign), Affirmed Ba2, outlook changed to Negative from Stable

....Counterparty Risk Assessment, Affirmed Ba1(cr)

....Adjusted Baseline Credit Assessment, Affirmed b1

....Baseline Credit Assessment, Affirmed b1

Outlook Actions:

....Outlook, changed to Negative from Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in January 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Armen L. Dallakyan
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Carola Schuler
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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