Fitch Places Sberbank Slovensko A.S. on Rating Watch Negative
OREANDA-NEWS. Fitch Ratings has placed Sberbank Slovensko a.s.'s (SBSK) 'BB+' Long-term Issuer Default Rating (IDR) on Rating Watch Negative (RWN). The rating action follows the announcement of SBSK's parent, Sberbank Europe AG (SBEU; BB+/Negative), that it has signed an agreement with Penta Investments to sell SBSK. A full list of rating actions is available at the end of this rating action commentary.
KEY RATING DRIVERS
The transaction is subject to regulatory approvals from the Antimonopoly Office of the Slovak Republic and the European Central Bank. The RWN on SBSK's IDR and Support Rating reflects that as a result of the change in the ownership the bank's ratings will cease to benefit from the potential institutional support from its ultimate parent Sberbank of Russia (SBRF, BBB-/Negative) and will reflect the intrinsic creditworthiness of SBSK, which is expressed by its 'bb-' Viability Rating (VR). Fitch does not rate Penta Investments and therefore cannot reliably assess its ability to provide support to SBSK.
Fitch believes that SBRF would have a high propensity to support SBSK until the disposal is completed. This view is based on (i) the track record of providing capital and funding; (ii) common branding and high reputational risks for SBRF from a default of SBSK; and (iii) SBSK's small size relative to the parent, limiting the cost of any support.
SBSK's VR and Short-term IDR are not affected by this rating action due to Fitch's view that the change in the bank's ownership would not significantly alter its standalone creditworthiness.
RATING SENSITIVITIES
Fitch expects to resolve the Rating Watches on SBSK's ratings upon the completion of the transaction. The bank expects the transaction to be completed within six months, upon receipt of regulatory approvals. Depending on the timing of the transaction and the availability of information, the resolution of the Rating Watches could extend beyond the typical six-month horizon. When resolving RWN, Fitch is likely to downgrade SBSK's IDR to the level of its VR and its Support Rating to '5' from '3'.
The rating actions are as follows:
Long-term foreign currency IDR: 'BB+'; placed on RWN
Short-term foreign currency IDR: 'B'; unaffected
Support Rating: '3'; placed on RWN
Viability Rating: 'bb-'; unaffected
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