Fitch Ratings has downgraded Garanti Bank Romania’s long- and short-term issuer default ratings to 'BB+' and 'B', from 'BBB-' and 'F3', respectively. The rating actions follow a similar revision of Garanti Romania's ultimate parent Turkiye Garanti Bankasi (TGB), the agency announced. However, the outlook is stable.

Fitch has also downgraded the support rating to '3' from '2', but the viability rating of Garanti Romania of 'b' was not affected by this rating action.

"The IDRs and Support Rating of Garanti Romania are underpinned by Fitch's view that the bank is a strategically important subsidiary of TGB. Garanti Romania shares the parent's brand and IT systems, and sources top management and board members from TGB. Fitch believes the parent has a strong propensity to support Garanti Romania, given their strong integration and the high reputational risk to TGB in allowing its subsidiary to default," reads Fitch's statement.

Garanti Bank was the 12th largest bank in Romania at the end of last year, with a market share of 2 percent.

Last year, Garanti Bank’s overall loan volume increased by 5.4 percent compared to 2012, reaching EUR 1.09 billion. The small and medium enterprises (SME) segment was the main driver, registering a 17 percent growth, but retail holds the largest share in the bank’s loan portfolio. Its deposits increased by 42 percent last year.

Irina Popescu, irina.popescu@romania-insider.com