Bangkok--19 Jan--Fitch Ratings
Fitch Ratings says in a quarterly report issued today that the overall bias of its bank ratings is increasingly positive with 13.5% of the total carrying Positive Outlook at Q406, compared to 11.9% in Q306. This is the highest since the inception of Fitch's Global Bank Rating Trends publication series in Q105. More than 80% of Fitch's bank ratings have Stable Outlook while only 3.6% are on Negative Outlook.
By far the most significant driver of bank rating action in Q406 was the positive reassessment of potential support for banks in the six Gulf Cooperation Council ("GCC") states, which saw 27 banks in the region being upgraded. Elsewhere in the emerging markets, new or increasing levels of foreign ownership helped to push up ratings from Taiwan to El Salvador, taking in the likes of Slovenia, Lithuania and Romania on the way.
"Clearly the internationalisation of banking markets remains a potent force for improving credit risk as Western banks continue to seek faster growth outside their largely mature domestic markets," said Gerry Rawcliffe, Managing Director in Fitch's Financial Institutions Group in London.
Overall the developed markets continued to show a high degree of rating stability, although the positive bias has become progressively stronger over the last three quarters, particularly in developed Americas and Asia, driven by USA and Japan respectively. Although the proportion of Positive Outlooks in developed Europe fell back slightly in Q4, it is still at a historically high level.
As in the previous reports, the emerging markets continued to show greater rating volatility, with the overall level of Stable Outlooks hovering around 75%, having trended upwards since Q405. The increased potential for volatility remains largely on the upside with Positive Outlooks at 16% and Positive Watches at 2.2%.
The number of ratings actions fell back from it Q3 peak but at 122 is still at a high level. The ratio of positive actions to negative actions in the fourth quarter was again positive with a ratio of almost 6:1, broadly similar to Q3.
The report will be available shortly on Fitch's public web site at 'www.fitchratings.com'.
Contact: Gerry Rawcliffe +44 (0)20 7862 4019; Ian Linnell (EMEA), +44 (0)20 7417 4344, London; James Moss (US), +1-312-368-3213, Chicago, David Marshall (Asia) +852 2263 9963, Tokyo or Peter Shaw (LatAm) +1-212-908-0553, New York.
Media Relations: Francoise Alos, Paris,
Tel: +33 1 44 29 91 22; Horst Bertram, Frankfurt, Tel: +49 69 7680 76130;
Julian Dennison, London, Tel: +44 20 7862 4080;
Ching-Yuen Lock, Singapore, Tel: +65 6238 7301; Kenneth Reed, New York, Tel: +1 212-908-0540.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com . Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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