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TEXT-Fitch affirms BNP Paribas at 'A+'

(The following statement was released by the rating agency)

Oct 10 - Fitch Ratings has affirmed BNP Paribas'

(BNPP) Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook and Short-term IDR at 'F1+'. At the same time, the agency has affirmed the bank's Viability Rating (VR) at 'a+', Support Rating Floor at 'A+' and Support Rating at '1'. A full list of rating actions is at the end of this rating action commentary.

The rating actions have been taken in conjunction with Fitch's Global Trading and Universal Bank (GTUB) periodic review. Fitch's outlook for the sector is stable. Positive rating drivers include improved liquidity, funding, capitalisation and more streamlined businesses, all partly driven by regulation. Offsetting these positive drivers are substantial earnings pressure, regulatory uncertainty and heightened legal and operational risks.

RATING DRIVERS AND SENSITIVITIES - LONG-TERM IDR, VR AND SENIOR DEBT BNPP's Long-term IDR and senior debt are driven by the group's intrinsic creditworthiness and are therefore equalised with its VR. The bank's VR reflects business diversification, sound franchises in European retail banking and corporate and investment banking (CIB), an ability to generate good earnings through different cycles, adequate funding and satisfactory capitalisation. The VR also takes into account earnings volatility from capital markets activities while benefiting from these being less important to BNPP's business model than at most of its GTUB peers. Further negative rating drivers are a high gross impaired loans ratio, notable exposure to risk in Italy and a lower quality liquidity buffer than most of its GTUB peers.

Significant asset quality deterioration, for example linked to BNPP's Italian exposure, consumer lending (especially in Spain and Italy), or unexpected problems from CIB, could lead to a downgrade of its VR. In addition, the bank's Fitch core capital ratio will need to remain at least at 9%-10% post-Basel III for BNPP to keep its current VR. Fitch does not expect to upgrade BNPP's VR in the near term.

If BNPP's VR was downgraded, its Long-term IDR would remain the same, as long as its Support Rating Floor remained unchanged. In this case, BNPP's Long-term IDR would no longer be based on its standalone strength but on expected support from the French state, if required.

RATING DRIVERS AND SENSITIVITIES - SHORT-TERM IDR, SUPPORT RATING AND SUPPORT RATING FLOOR BNPP's Short-term IDR, Support Rating and Support Rating Floor reflect Fitch's opinion that, given BNPP's systemic importance, both domestically and internationally, there is an extremely high probability that support from the French authorities would be forthcoming, if required.

The bank's Short-term IDR, Support Rating and Support Rating Floor are potentially sensitive to any change in assumptions around the French state's ability (as reflected in its ratings) or willingness to provide timely support to BNPP. These ratings are also sensitive to a change in Fitch's assumptions around the availability of sovereign support for the bank. In this context, Fitch is paying close attention to ongoing policy discussions around bank support and 'bail in', especially in Europe.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by BNPP, BNP Paribas US Medium-Term Notes Programme LLC and BNP Paribas Capital Trust VI are all notched down from BNPP's VR in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profiles, which vary considerably. Their ratings are primarily sensitive to any change in BNPP's VR.

SUSBIDIARY AND AFFILIATED COMPANY RATING DRIVERS AND SENSITIVITIES The Long-and Short-term IDRs and Support Rating of the group's French subsidiaries, BNP Paribas Securities Services and BNP Paribas Public Sector SCF, are based on an extremely high probability of support from BNPP if needed and are therefore sensitive to changes in BNPP's IDRs. The ratings of these subsidiaries could also be sensitive to changes in their strategic importance to the rest of the group.

BNP Paribas Arbitrage Issuance BV, BNP Paribas US Medium-Term Notes Programme LLC and BNP Paribas Finance Inc are wholly owned financing subsidiaries of BNPP whose debt ratings are aligned with that of BNPP based on an extremely high probability of support if required and whose ratings are sensitive to the same factors that might drive a change in BNPP's IDR.

The rating actions are as follows:

BNPP

Long-term IDR: affirmed at 'A+'; Stable Outlook Short-term IDR: affirmed at 'F1+' Viability Rating: affirmed at 'a+' Support Rating: affirmed at '1' Support Rating Floor: affirmed at 'A+' Short-term debt: affirmed at 'F1+' Long-term senior debt: affirmed at 'A+' Market linked securities: affirmed at 'A+emr' Subordinated debt (lower Tier 2): affirmed at 'A' Upper Tier 2: affirmed at 'BBB+' Hybrid capital: affirmed 'BBB' BNP Paribas Securities Services: Long-term IDR: affirmed at 'A+'; Stable Outlook Short-term IDR: affirmed at 'F1+' Support Rating: affirmed at '1' BNP Paribas Arbitrage Issuance BV Long-term senior debt: affirmed at 'A+' Market linked securities: affirmed at 'A+emr' BNP Paribas Capital Trust VI Preference shares: affirmed at 'BBB' BNP Paribas Public Sector SCF Long-term IDR: affirmed at 'A+'; Stable Outlook Short-term IDR: affirmed at 'F1+' Support Rating: affirmed at '1' Public Sector Covered Bonds: 'AAA' Unaffected BNP Paribas Finance Inc. Commercial paper: affirmed at 'F1+' BNP Paribas US Medium-Term Notes Programme LLC Short-term debt: affirmed at 'F1+' Long-term senior debt: affirmed at 'A+' Market linked securities: affirmed at 'A+emr' Subordinated debt: affirmed at 'A'

Additional information is available at

. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 15 August 2012; 'Treatment of Hybrids in Bank Capital Analysis', dated 9 July 2011; 'Rating Bank Regulatory Capital and Similar Securities' dated 15 December 2011; 'Rating FI Subsidiaries and Holding Companies' dated 10August 2012 are available at

. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria Securities Firms Criteria (New York Ratings Team)

((e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;))