Fitch Ratings has assigned
The assignment of a final rating is contingent on the receipt of final documents conforming to the information already received.
The bonds are expected to be euro-denominated instruments issued under the bank's Euro Medium Term Note Programme.
Key Rating Drivers
Transilvania's SNP debt is rated one notch below the bank's Long-Term Issuer Default Rating (IDR). This is in line with the baseline notching as per Fitch's Bank Rating Criteria and reflects: i) no full depositor preference in
Transilvania's fully loaded resolution requirements under minimum requirement for eligible liabilities (MREL), binding from
Transilvania's ratings reflect its strong and well-established domestic franchise, solid capital position supported by resilient internal capital generation and healthy funding profile. It also factors in the bank's reasonable asset quality, underpinned by conservative underwriting (see 'Fitch Affirms Banca Transilvania at 'BB+'; Outlook Stable' published on
At end-2022, Transilvania's common equity Tier 1 (CET1) ratio stood at 18.4% and total capital ratio at 20.8%, on a consolidated basis. The bank met its end-2022 interim MREL target (of 18.8% excluding CBR) with regulatory capital, subordinated debt (no longer Tier 2 eligible) and senior debt. The bank's liability structure is dominated by customer deposits (around 94% of total funding at end-2022), of which two-thirds comprised household deposits.
Rating Sensitivities
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrade of Transilvania's Long-Term IDR.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Upgrade of Transilvania's Long-Term IDR.
Change in Transilvania's MREL requirements or funding plans, particularly if it becomes clear that the bank will not use senior preferred debt to meet its resolution buffer or if we expected the bank to build-up and maintain a buffer of SNP and more junior debt that sustainably exceeded 10% of RWAs.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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