The stand-alone rating is ‘bb+’, one notch above the rating for the Bulgarian operative environment.

Fitch Ratings has assigned a Long-Term Issuer Default Rating

(IDR) 'BB+' with Stable Outlook to UniCredit Bulbank. The bank’s stand-alone (VR) rating is affirmed at bb+, one notch above the rating for the Bulgarian operating environment.

Fitch commented that the change from IDR ‘BBB-‘ to ‘BB+’ of UniCredit Bullbank follows the downgrade of the parent Company UniCredit S.p.A (UniCredit) to 'BBB-'/Stable from 'BBB'/Negative, reflecting itself a downgrade of the sovereign rating of Italy, which affected four Italian banks’ ratings (see 'Fitch Downgrades Four Italian Banks Following Sovereign Downgrade', dated 12 May 2020 on www.fitchratings.com).

“Bulbank's VR of 'bb+'is one notch above our assessment of the Bulgarian operating environment and is underpinned by the bank's robust capitalisation, stable funding, and comfortable liquidity”, said Fitch Ratings in their official press release.

“Bulbank' capitalisation is a rating strength due to the bank's high capital ratios, substantial buffers over regulatory minimum, conservative risk appetite and solid internal capital generation.“, commented the agency and notes that at end-2019 Bulbank's Common Equity Tier 1 ratio stood at 21.5% and would be 24.6% if 2019 profit was included.  

In  addition Fitch expects UniCredit Bulbank's “overall asset quality to remain strong compared to the average in the Bulgarian banking sector given the bank's relatively conservative new loan origination, and limited overhang of legacy bad debts“.

According to Fitch the “bank's strong revenue generation reflects its strong franchise in key business segments and dominant market position. Funding and liquidity profile is strong.“

Full press release of Fitch is available at www.fitchratings.com