Fitch Affirms Germany's Debeka Bausparkasse.LONDON -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. , the international rating agency, has today affirmed Debeka Bausparkasse's (DBKBS) ratings at Long-term 'A-', Short-term 'F2', Individual 'B/C', and Support '3'. The Rating Outlook is Stable. DBKBS' Long-term, Short-term, and Individual ratings reflect the low risk and specialised nature of its retail mortgage lending business, its low cost base, and steady financial performance. At the same time, they also take into account DBKBS' small size and adequate capital ratios. There is upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar in DBKBS' ratings if the bank is able to demonstrate improved asset quality, notably in its commercial loan portfolio, strengthen its long-term funding, and continue to generate capital internally to build a larger capital base. The quality of DBKBS' loan portfolio remains good by domestic standards but has been affected by the difficult economic environment and the downturn in the German real estate market, resulting in higher loan loss provisions in respect to commercial loans dating from 1997-2001. As a result, DBKBS has ceased extending commercial loans larger than EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2.5 million. Fitch notes that new commercial lending has not caused any material problems to date. The bank's reported Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio was 6.1% at the end of March 2005 but would be stronger if the bank's Bauspar reserve were treated as equity in accordance with International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). . The reserve's purpose is to provide a cushion for a bank in case the amount of Bauspar deposits is insufficient to cover Bauspar loans. DBKBS reports under German GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . DBKBS is integral to the Debeka group, which is mainly active in insurance and at the end of 2004 had consolidated assets of around EUR50 billion and 5.8 million customers. Debeka's sales force of more than 7,600 full-time staff also distributes DBKBS' products. DBKBS had 466 employees at the end of 2004. Fitch's rating definitions are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies and relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from this site, at all times. This document will remain on the public site for seven days. |
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