Dear Client,
The international rating agency Standard & Poor's has capped UniCredit Bulbank’s credit ratings with the credit ratings of Bulgaria BBB-/A-3 with a stable outlook. S&P said the ratings cut follows as a consequence of the country’s ratings downgrade. According to the rules, the credit rating of a financial institution may not be higher than that of the country in which it operates.
Among the main reasons for the revision of Bulgaria’s rating by S&P is the unstable political situation in the country. According to the rating agency, the current political environment continues to pose challenges for carrying out the necessary reforms to address long-term institutional and economic problems and hinders economic growth. On the positive side and in support of the stable outlook, the rating agency outlined the fiscal flexibility and low levels of budget deficit and public debt.
A report by Standard & Poor's stated that the rating agency considers UniCredit Bulbank to be a strategically important subsidiary of UniCredit Bank Austria AG. The stable outlook on UniCredit Bulbank reflects that on Bulgaria and our [S&P] expectation that the bank's financial profile will remain generally unchanged over the next two years and UniCredit Bulbank will remain a "strategically important" subsidiary for UniCredit Bank Austria, S&P added.
Impact on investors: For information purposes only.