Fitch pulls mBank from watch

Fitch Ratings said it affirmed mBank SA's long-term issuer default rating at BBB-, removed it from rating watch negative and assigned a negative outlook. Fitch also downgraded the bank's national long-term rating to A(pol) from A+(pol). The outlook on the national long-term rating is negative.

The agency said it does not consider the operating environment and pre-existing pressures tied to the bank's exposure to foreign-currency mortgages severe enough to warrant an immediate downgrade of the bank's issuer rating.

Fitch said it trimmed the bank's national long-term rating because the pressures coming from the operating environment, coupled with the bank's exposure to legal risk from its foreign-currency exposures, mean the bank's credit profile has deteriorated inside the BBB- rating and relative to other Polish issuers'.

The negative outlook reflects the downside risk to the bank’s credit profile. “These include the potential for a higher-than-currently expected volume of further legal cases brought by FC mortgage borrowers, the risks of further potential intervention in the banking sector by the Polish authorities, and the possible broader impact of a weaker economy, which could exert stronger-than-currently anticipated pressure on mBank's profitability and capital position,” the agency said in a press release.

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