Fitch Ratings on Dec. 18 affirmed Groupe BPCE's A/F1 long- and short-term issuer default ratings and its "a" viability rating, and revised the outlook on the French banking group to positive from stable.
The outlook revision reflects the group's improving capital levels, its higher new common equity Tier 1 ratio target, its ability to generate consistent earnings despite an unfavorable interest rate environment and the strong execution of is 2014-2017 strategic business plan, the rating agency said. The group is targeting a CET1 ratio of more than 15.5% by 2020, compared to 14.3% at 2016-end.
Fitch noted that it expects the group to maintain a modest risk appetite, continue to reduce its stock of impaired loans and maintain strict liquidity policies.
Meanwhile, the agency withdrew the ratings of Banque Populaire Grand Ouest following its absorption by Banque Populaire Atlantique and the creation of merged regional group Banque Populaire Grand Ouest.
Fitch also affirmed the A(dcr) derivative counterparty ratings of Groupe BPCE units BPCE SA and Natixis.