Fitch upgrades VB-Verbund

Fitch Ratings said it upgraded Volksbanken-Verbund's (VB-Verbund) viability rating to BBB from BBB-, long-term issuer default rating to BBB from BBB- and short-term issuer default rating to F2 from F3.

The agency also said it upgraded the issuer default rating of VB-Verbund's member banks to BBB/F2 from BBB-/F3.

The outlook is stable.

The upgrades reflect the greater stability of the group's business model, driven by the near completion of its three-year restructuring program and management's efforts to streamline the product range and risk management across the group, Fitch said.

It also factors in an expectation that continued earnings recovery will enable VB-Verbund to repay the remaining state capital on time without jeopardizing the group's adequate capitalization, the agency said.

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