June 1, 2017 / 4:21 PM / in 5 months

Fitch Upgrades Union de Banques Arabes et Francaises to 'A-'/'F1'

(The following statement was released by the rating agency) PARIS/LONDON, June 01 (Fitch) Fitch Ratings has upgraded Union de Banques Arabes et Francaises' (UBAF) Long-Term Issuer Default Rating (IDR) to 'A-' from 'BBB+', Short-Term IDR to 'F1' from 'F2' and Support Rating to '1' from '2'. The Outlook on the Long-Term IDR is Stable. UBAF's Viability Rating of 'bb' is unaffected. The rating action follows the recent rating action on UBAF's largest shareholder, Credit Agricole Corporate and Investment Bank (CACIB). CACIB's Long-Term IDR was upgraded to 'A+/Stable' from 'A/Positive' on 23 May 2017. The upgrade of the parent's rating signals our view that its ability to support UBAF has increased. KEY RATING DRIVERS IDRS AND SUPPORT RATING The IDRs and Support Rating of UBAF are driven by potential support from its largest shareholder, CACIB (A+/Stable; 47% shareholder), part of Credit Agricole (CA; A+/Stable). Fitch believes that timely support, if required, would be provided by CACIB (or ultimately by CA) in its role as UBAF's reference shareholder. The two-notch difference between CACIB's and UBAF's Long-Term IDRs reflects Fitch's opinion that UBAF is of limited importance to the parent. This takes into account UBAF's limited role in the group and niche franchise, as well as the absence of material synergies with CACIB. This is counterbalanced by the high reputational risk for the parent if UBAF defaults in addition to UBAF's small size, which would require limited resources of the parent in case of support. The Stable Outlook on UBAF's Long-Term IDR mirrors that on CACIB and CA. UBAF's Short-Term IDR has been upgraded to 'F1' from 'F2'. We have upgraded to the higher of two options mapping to an 'A-' Long-Term IDR to reflect our view that, as long as it remains a reference shareholder, CACIB will ensure that sufficient liquidity is available at UBAF to meet its needs. RATING SENSITIVITIES IDRS AND SUPPORT RATING UBAF's IDRs and Support Rating are sensitive to a change in CACIB's, and therefore CA's, IDRs. The ratings are also sensitive to a change in UBAF's links to CACIB and could be negatively affected if these weaken, for example because of a sale or material reduction in the ownership stake. Contact: Primary Analyst Francois-Xavier Deucher, CFA Director +33 (0) 1 44 29 92 72 Fitch France S.A.S. 60, rue de Monceau 75008 Paris Secondary Analyst Mahin Dissanayake Director +44 203 530 1618 Committee Chairperson Bridget Gandy Managing Director +44 20 3530 1095 Media Relations: Francoise Alos, Paris, Tel: +33 1 44 29 91 22, Email: francoise.alos@fitchratings.com; Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. 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