Fitch affirms Garanti Bank’s long-term IDR with stable outlook

Fitch Ratings affirmed Garanti Bank Romania’s long-term Issuer Default Rating (IDR) at ‘BB-’, with stable outlook, while the bank’s Viability Rating was also affirmed at ‘bb-’, despite legislative uncertainties having already had an impact on the market and the financial system.

According to a Garanti Bank release, the stable outlook on its IDR reflects Fitch’s view that the bank is sufficiently independent from the parent bank. The funding of the bank is predominantly from customer deposits and the bank is not reliant on parent funding. GBR’s liquidity position is adequate as reflected by cash, accounts at central bank and other liquid assets such as government bonds.
Fitch emphasized that their recent decision reflects Garanti Bank’s resilience, despite increased operating environment risks to the banking sector arisen from a series of proposed or adopted legislative measures.
Fitch affirmed the viability rating of the bank mentioning that “the bank’s improving capital metrics and reasonable pre-provision profitability provide a cushion against the potentially significant impact of a punitive bank tax in the short to medium term.”
“We have always targeted a sustainable and healthy organic growth in the market. Fitch’s assertion of our ratings confirms our strength and our ability to carry out the ambitious long-term plans we have in Romania,” said Ufuk Tandoğan, CEO of Garanti Bank Romania.

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