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SIGNET BANKING SENIOR DEBT RAISED TO 'BBB+' FROM 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 25 ~PRNewswire~ -- Signet Banking Corp.'s 7.75 percent senior debentures due 1997 are raised to 'BBB+' from 'BBB-' by Fitch. The credit trend is revised to improving from declining. The upgrade stems from considerable improvement in asset quality and profitability as well as maintenance of strong capital ratios. In addition, restructuring actions taken in last year's fourth quarter greatly reduce the risks in the loan portfolio.
 Following last year's loss and poor earnings in 1990, Signet's operating results returned to strong levels during the first nine months of 1992. Predicated largely on a sharp decline in net chargeoffs and continued growth in credit card servicing fees, Signet's third quarter 1.04 percent return on assets (ROA) reflected very strong core earnings and boosted the year-to-date ROA, net of non-recurring items and forestalled charges, to 0.84 percent.
 Furthermore, despite the possibility that loan losses may have been slowed and could rise again in future periods, commensurate provisions would not necessarily be warranted since the current reserve already covers 125 percent of nonperforming loans and delinquencies. In addition, if Signet is successful in disposing of the assets in its "liquidating" portfolio, including approximately $400 million of performing loans as of Sept. 30, the risk profile of the company's ongoing book of loans will be substantially improved. Upon completion of the company's accelerated real estate asset reduction program, construction loans will account for roughly 5.9 percent of loans, down from 18.5 percent at year-end 1990.
 Fitch downgraded Signet's senior debt in August 1991 to 'BBB-' from 'BBB', reflecting a dramatic increase in nonperforming assets (NPAs). By mid-year 1991, NPAs and 90-day delinquencies had risen to 7.1 percent of loans and foreclosed properties from 2 percent six quarters earlier. During the fourth quarter of 1991, Signet took a $163 million special provision for real estate loans and foreclosed properties and booked an additional $29 million in other real estate expenses, resulting in a $52 million quarterly loss net of $58 million in securities gains, and a $26 million annual loss.
 Since then, improvement in Signet's financial condition has been rapid. The company's NPA ratio dropped 114 basis points to 4.4 percent during 1992s first three quarters. Underlying the improvement was a significant reduction in Signet's holdings of foreclosed properties. However, Signet's foreclosed properties reserve, which was $41 million at year-end 1991 but only $12 million at Sept. 30, may need to replenished to facilitate further asset dispositions.
 -0- 11~25~92
 ~CONTACT: Christopher M. Siedman, 212-908-0524, or Scott J. O'Donnell, 212-908-0531, both of Fitch~


CO: Signet Banking Corporation ST: IN: FIN SU: RTG

PS -- NY033 -- 1516 11~25~92 12:43 EST
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Publication:PR Newswire
Date:Nov 25, 1992
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