Fitch predicts stable outlook for CEE banks in 2015

Fitch Ratings on Wednesday said the overall rating outlook for banks in Central and Eastern Europe (CEE) is stable for 2015. However, the proportion of ‘negative outlooks’ for banks increased in 2014 due to expected downward revisions of Support Rating Floors in the EU. This affected CEE banks either directly – resulting in the negative outlooks for the Slovenian banking sector – or indirectly via rating actions on parent banks, the agency said in a statement.

Systemic risks stemming from structural imbalances are gradually receding, but operating environments remain difficult, Fitch said. “The combination of low interest rates, stabilizing but weak economic growth and more onerous consumer protection/regulatory legislation is weighing on revenues and pushing up costs,” the rating agency added. Fitch expects such pressures to be easily absorbed in better performing sectors in the Czech Republic, Poland and Slovakia or partly compensated by reduced impairment charges in Romania, Bulgaria, Hungary and Slovenia.

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