International rating agency Fitch has upgraded the Long-Term Issuer Default Rating (IDR) of UniCredit Bank Romania (UCBRO) to BBB from BB+, with a stable outlook, and its short-term individual default rating (IDR) to F2, from B. The viability rating (VR) has been affirmed at bb.

The two-notch upgrade of UCBRO's IDRs reflects the upgrade of its parent UniCredit S.p.A on 17 December 2021 and Fitch's decision to equalise the ratings of the Romanian subsidiary with those of the parent.

The rating agency says that UCBRO's standalone credit profile has improved since the last review, but remains slightly weaker than larger domestic peers, in particular, due to a still higher impaired loan ratio, weaker profitability and moderately weaker overall franchise, with the latter impacting our assessment of the bank's business profile.

UCBRO is a mid-sized (fifth-largest by assets) Romanian bank, accounting for around 8.0% of sector assets, 7.5% deposits and 8.6% loans at end-1H21.

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andrei@romania-insider.com