S&P Assigns 'A+' LT Rtg To B. Fed. Credit Mutuel.PARIS--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/28/98--Standard & Poor's today assigned its single-'A'-plus long-term counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit rating to Banque Federative fed·er·a·tive adj. Forming, belonging to, or of the nature of a federation. fed  er·a du Credit Mutuel (BFCM). The outlook is negative.
At the same time, Standard & Poor's 'A-1' short-term
counterparty credit and short-term certificate of deposit ratings on
BFCM and Banque de l'Economie - Credit Mutuel were affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. . BFCM's ratings are based on its membership of the Credit Mutuel Group, whose constituent entities are rated single-'A'-plus/Negative/'A-1'(see list below). They also reflect the business and financial profile of BFCM's parent federation, Credit Mutuel Centre Est Europe (CMCEE), which is a key member of the Credit Mutuel group. Standard & Poor's considers BFCM and CMCEE's credit risk to be identical, mainly because of the 100% ownership of the former by the latter and BFCM's total operational and administrative integration within the CMCEE group. CMCEE is the strongest regional bank in France, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de its dominant market position in its home region of Alsace-Lorraine in eastern France. It is also the largest regional federation within the Credit Mutuel group in terms of total assets, earnings, and capital. Historically, CMCEE has also been characterized by very high and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. profitability, and excellent capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. relative to risks. CMCEE's superior financial profile within the group led it to oversee and finance the 1998 acquisition from the French state of 67% of Compagnie Financiere de CIC CIC circulating immune complexes. CIC Circulating immune complexes. See Immune complexes. et de l'Union Europeenne (CIC, rated single-'A'/Stable/'A-1'), the ninth-largest banking group in France. CMCEE (through BFCM) financed the French franc (FFr)13.4 billion (US$2.23 billion at FFr6.0 to US$1) acquisition entirely from its own funds. Standard & Poor's considers CIC and Credit Mutuel's customer bases to be complementary. With the acquisition of CIC, both CMCEE and Credit Mutuel have undoubtedly increased their domestic market position. The enlarged group had a domestic market share of 11% of credits and 11.5% of total deposits at Dec. 31, 1997, making it one of the three largest retail banks in France. Nevertheless, in Standard & Poor's view, although sound from a strategic point of view, the consolidation of CIC has negatively affected CMCEE's consolidated profitability ratios Profitability ratios Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment. , asset quality indicators, and capital levels. OUTLOOK: NEGATIVE Standard & Poor's expects that CMCEE's prime role within the Credit Mutuel group will continue, while its dominant market position and satisfactory financial profile should remain. CMCEE's creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. also remains closely tied to the overall credit assessment of the Credit Mutuel group because its legal status and internal system of solidarity empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems Credit Mutuel's central organ (Confederation A union of states in which each member state retains some independent control over internal and external affairs. Thus, for international purposes, there are separate states, not just one state. Nationale du Credit Mutuel) to take any steps necessary to ensure the liquidity and the solvency of each member. However, as in the case of the Credit Mutuel group as a whole, the negative outlook reflects Standard & Poor's expectation that CMCEE's long-term rating could come under pressure. This could occur if there is no pick-up in CIC's profits or if BFCM fails to meet the challenge of managing and controlling a CIC group whose federal structure gives considerable autonomy to its constituent regional banks. Credit Mutuel's management will also be challenged to combine two banking groups with distinct corporate cultures and management styles. Finally, the outlook takes into account the group's continuing sensitivity to the current low level of interest rates, Standard & Poor's said. -- CreditWire -0- NEW RATING Banque Federative du Credit Mutuel Counterparty credit rating A+ AFFIRMED RATINGS Banque Federative du Credit Mutuel Counterparty credit rating A-1 Certificate of deposit A-1 Banque de l'Economie-Credit Mutuel (guaranteed by the Banque Federative du Credit Mutuel) Counterparty credit rating A-1 Certificate of deposit A-1 (guaranteed: Banque Federative du Credit Mutuel) |
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