Fitch Ratings affirmed Austria’s long-term foreign and local currency Issuer Default Ratings at AAA with a stable outlook.
“Notwithstanding the strong fundamentals, the exposure of Austrian banks to Emerging Europe, including large volumes to weaker members, is significant, but currently is not a material risk to Austria’s AAA status,” Gergely Kiss, a director in Fitch’s sovereign group, said in a statement today.
The Alpine republic was cut to AA+ at S&P in January, losing the top rating it had held since 1975. Moody’s lowered its outlook on the country’s Aaa rating to negative a month later. Both rating companies cited Austrian banks’ activities in eastern Europe as a reason for their actions.
In contrast Fitch said today that the lenders’ net exposures to the region are at a “manageable level” and “currently pose a small fiscal risk.”
The nation’s biggest banks, including Erste Group Bank AG (EBS), Raiffeisen Bank International AG (RBI) and UniCredit SpA (UCG)’s Bank are the biggest lenders in the former communist part of the continent. Austrian banks have lent a combined $245 billion to borrowers in eastern Europe, about two-thirds of the Alpine nation’s gross domestic product. That figure doesn’t include the Italian-owned Bank Austria.
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