Dec 14, 2010

Fitch affirms BNI rating at BB+

Fitch Ratings has today affirmed PT Bank Negara Indonesia Tbk's (BNI) long-term foreign and local currency issuer default rating (IDRs) at BB+, national long-term rating at AA(idn), and individual rating at C/D. The outlook is stable.
"The affirmations of BNI's ratings are underpinned by its gradually improving levels of profitability, asset quality and capital after the impending rights issue, and concerted efforts to enhance its risk and corporate governance framework," said Iwan Wisaksana, Director with the agency's Financial Institutions group, in a press statement.
Its national rating is currently lower than that of other large banks in Indonesia, and an upgrade will be dependent on a sustained record of improved financial performance which, in Fitch's opinion, is more likely over the longer term.
Although the government's stake in BNI is estimated to fall to 60.0% (Q310:73.3%) following the Rp10.5 trillion rights issue at end-2010, Fitch expects government support to remain forthcoming in times of need, given its systemic importance as Indonesia's fourth-largest bank.
These considerations underpin the Support rating at 3 and support rating floor of BB, which are similar to other systemically important banks in Indonesia.
With the Rp10.5 trillion rights issue, Fitch estimates that BNI's tier 1 capital adequacy ratio (CAR) and total CAR would be 16% and 18%, respectively, by end-2010 (Q310 Tier 1 CAR: 10.2%; Q310 total CAR: 12.0%).

Disclosure: No position at the stock mentioned above.

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