Getin Noble Bank (GNB)

1.94PLN
+ 4.86% 16:14

Current report 24/2010

28.04.2010

Granting rating to Getin Noble Bank S.A. by Moody’s

Getin Noble Bank S.A. (the “Issuer”, the “Bank”) hereby informs that Moody’s Investors Service (“Moody’s”) assigned on 27 April 2010 the following ratings to the Issuer: a bank financial strength rating (BFSR) of D- (BCA Ba3) and long- and short-term local and foreign currency deposit ratings of Ba2/Not Prime. The outlook on all ratings is stable.

Ratings assigned are on better (higher) level than those assigned to Getin Bank S.A. before the merger with Noble Bank S.A. in January 2010. Getin Bank S.A. had been assigned then rating of D- (BCA Ba3) and Ba3/Not Prime with negative outlook.

According to Moody's, ratings assigned to the Issuer reflect its improved overall franchise and earnings diversification, good efficiency and capital creation capability. Moody’s views that after the merger of Noble Bank S.A. and Getin Bank S.A. in January 2010, the Issuer's market share is about 4% in total loans and 4.5% in total deposits. According to Moody’s, the Bank is a market leader in auto loans, has a strong position in mortgage lending and leading position in retail investment products. In addition, the group's consumer lending operations have expanded considerably for the last three years. In Moody’s opinion, the contribution of corporate business, which principally consists of SME financing, to profitability has been relatively small.

Moody’s observes that the Bank's BCA is also constrained by aggressive historic loan growth, relatively high level of non-performing loans particularly in consumer lending, contracting interest margins and high reliance on derivatives markets for mitigating a large FX mismatch on its balance sheet.In addition, the Bank is 93.7% -owned by Getin Holding , which is effectively owned by one individual. Moody's views the bank's organisational structure and risk management systems and procedures as evolving after the merger and there is a scope for further improvement in this area.

On the other hand, Moody's notes that the Issuer's liquidity and funding has improved during the last year with retail deposits fully funding the loan portfolio. The bank's loan concentration also remain low which reflects its primarily retail orientation. Although the bank's efficiency ratios compared favourably with its peer group Moody's considers that asset quality trends and associated provisions will be primary drivers in determining performance of the bank in the near future.

The Issuer's Ba2/NP deposit ratings are based on the bank's BFSR of D-, which maps to a BCA of Ba3. Moody's has incorporated a low expectation of systemic support into the bank's long-term deposit ratings given its improved retail deposit franchise and presence in the Polish market.

Moody’s has assigned ratings to the Issuer for the first time. In previous years, Moody’s assigned ratings to Getin Bank S.A. (a company merged with Noble Bank S.A. on 4 January 2010).

The principal methodologies used in rating of the issuer mentioned in this press release are "Bank Financial Strength Ratings: Global Methodology" and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", which can be found at www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered can also be found in the Rating Methodologies sub-directory on Moody's website.

Legal basis: Article 56 (1)(2a) of the Polish Act of 25 July 2005 on public offerings and the conditions for introducing financial instruments into an organized trading system and on public companies (Journal of Laws of 2005, No. 184, item 1539 with later amendments) read with §5 (1)(26) of the Minister of Finance Regulation of 19 February 2009 on current and periodic reporting by issuers of securities and the rules of equal treatment of the information required by the laws of non-member states (Journal of Laws of 2009 No. 33, item 259 with later amendments).