Fitch considers raising Novobanco's rating after sale to BPCE

Fitch will assess a possible upgrade of Novobanco's rating now that it has been acquired by the French BPCE, because it will benefit from the integration of an international group.

In a statement to the market, the institution led by Mark Bourke announced that Fitch has placed the long-term and short-term default risk ratings on Rating Watch Positive . They are currently BBB and F2, respectively.

“This financial rating action reflects “Fitch's perspective that Novobanco, if acquired by Groupe BPCE”, which has an A rating with a Stable outlook, “will most likely benefit from the support of the shareholder, with a higher financial rating”, reads the statement published this Friday by CMVM.

“Upon completion of the acquisition, Fitch will likely base Novobanco’s default ratings on shareholder support and assign a Shareholder Support Rating (SSR).” Fitch expects to reassess the Rating Watch Positive upon completion of the transaction , the same note adds.

Moody's decided, on the 17th of this month, to reaffirm Novobanco's financial ratings, including the rating of its senior unsecured debt at Baa1 with a positive outlook . However, its integration into the second largest French banking group, which includes institutions such as Banque Populaire, Caisse d'Epargne, Natixis, among others, could lead to an increase in the rating in the future.

Moody's also states that "an upgrade of the financial rating of long-term deposits and senior unsecured debt could be driven by an improvement in its adjusted BCA . The bank's adjusted BCA could be revised upwards: (1) if the acquisition of the bank by Groupe BPCE is successfully completed ; or (2) if the recent improvements in its credit profile and in the operating environment of Portuguese banks are maintained over the next 12 to 18 months."

Moody's assigns BPCE a long-term debt financial rating of A1, with a stable outlook.