Fitch Ratings on Jan. 3 took ratings actions on Germany's Norddeutsche Landesbank Girozentrale following its recent €2.8 billion cash injection from its state owners and savings banks as part of a recapitalization package.
The agency affirmed the long- and short-term issuer default ratings of the bank and its unit NORD/LB Luxembourg SA Covered Bond Bank at A-/F1 and removed the ratings from Rating Watch Negative, where they were placed in December 2018. The outlook on the long-term ratings is stable.
Both entities' long-term senior unsecured debt ratings of A- and support ratings of 1 were also affirmed and removed from Rating Watch Negative, along with NordLB's A-/F1 long- and short-term bank deposit ratings and A-(dcr) derivative counterparty rating.
Concurrently, Fitch upgraded NordLB's viability rating to "bb+" from "f," reflecting the improvement in its common equity Tier 1 ratio to about 14% at 2019-end, comfortably meeting regulatory requirements. It also takes into account the transformation of NordLB's business model into a regionally focused wholesale bank, with a balance sheet of below €100 billion and significantly better capitalization and asset quality, the agency noted.