FIMBank plc - Credit rating downgrade by Fitch

On 26 January 2015, FIMBank plc announced that Fitch Ratings have downgraded both the Bank’s long-term issuer default rating and viability rating from ‘BB’ to ‘BB-‘.

According to Fitch, this downgrade reflects the Bank’s high risk appetite which was the reason behind the significant deterioration of the Bank’s asset quality, resulting in unstable and weak earnings. Fitch reported that the severe impairments suffered by the Bank were attributable to the weak performance of several entities across the FIMBank group, particularly in Russia and India.

Fitch indicated that a positive rating action would only be forthcoming if there is a substantial recovery of the asset quality and earnings, sustained by evidence of improved risk controls. The announcement also indicated that the Bank’s Board of Directors has already started implementing measures to this effect, and positive results are expected in the short term.

FIMBank highlighted that the support from its major shareholders, namely Burgan Bank and United Gulf Bank, is expected to allow the Group to overcome these difficulties and the challenging times ahead.