Moody's Investor Services Upgraded RZB Rating
OREANDA-NEWS. Moody's Investor Services released their review of Austrian banks. RZB's long-term rating was upgraded two notches to "Aa2" from "A1", the outlook remains stable. The Financial Strength Rating (FSR) was "C+" and is "C" now. RZB's short-term rating remains at "P-1", reported the press-centre of Raiffeisen Bank Aval. RZB was reviewed on the basis of Moody's new Joint Default Analysis (JDA) approach for the first time. Compared to Moody's former rating model, this approach attaches more importance to external factors and reassesses their significance for the FSR. Therefore, the modification of the FSR is determined by the new rating approach. Moody's commented that RZB's Aa2/P-1 ratings of RZB reflect its central position within the Raiffeisen Banking Group, the largest banking group in the Austrian market with consolidated assets of more than 205 billion Euro and dominant market shares of 27,8 per cent of total deposits, 23,4 per cent of loans and 29,0 per cent of securities funds as at December 2006.
"Despite of far reaching changes in its rating model, Moody's confirmed RZB's successful path. Our market position in Austria as well as in Central and Eastern Europe is quite strong, the EU accounts for more than 60 per cent of our assets", said Walter Rothensteiner, CEO of RZB. Last year, Standard & Poor's rated RZB "A+". As S&P is following a more conservative rating approach its "A+" was already noticed as upgrade against Moody’s "A1".
"We are delighted with the double-A assignment by Moody’s", said Patrick Butler, RZB board member for Treasury and Investment Banking. "It reflects RZB's rooting in a rock-solid and secure market environment. Thinking of RZB's sound risk and earnings profile, I consider this step as long overdue. However, it underpins our claim to be a top-notch borrower, deservedly ranking among the top-100 institutions worldwide."
RZB's 2006 results according to IFRS at a glance: Compared to 2005, RZB's total assets rose by 23 per cent to 115,6 billion euros. RZB’s own funds ratio is 10,8 per cent. Profit before tax was 1.882 billion euros, after 930 million euros in 2005. This includes a one-off effect in the amount of 596 million euros. The cost/income ratio improved by 2,2 percentage points to 56,7 per cent. The return on equity rose from 23,9 per cent in 2005 to 26,7 per cent in 2006 (39,1 per cent including the one-off effect).
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