Fitch Ratings on Aug. 13 upgraded the viability rating of Erste Group Bank AG unit Erste Bank Hungary Zrt. to "bb+" from "bb" and that of Intesa Sanpaolo SpA unit CIB Bank Zrt. to "bb-" from "b+."
The rating agency affirmed Erste Bank Hungary's and KBC Group NV unit Kereskedelmi és Hitelbank Zrt.'s long- and short-term issuer default ratings at BBB/F2, with a positive outlook on the long-term rating. The ratings were affirmed at BBB-/F3 for CIB Bank, with a stable outlook on the long-term rating.
The viability rating of the KBC Group unit was affirmed at "bb+." Also, the three banks' support ratings of 2 were affirmed.
The upgrades of the viability ratings reflect improvement in the financial metrics of Erste Bank and CIB Bank and the banks' strong capital positions. The rating also incorporates the fact that the levels of capital encumbrance by unreserved nonperforming loans are low for Erste Bank and modest for CIB Bank.
The issuer default ratings indicate that the three Hungarian banks are likely to keep receiving potential support from their parent companies.