TEXT-Fitch: Negative outlook for Portuguese Banks driven by sovereign; improved capitalisation

(The following statement was released by the rating agency)

Oct 11 - Fitch Ratings says in a new report that its outlook for Portuguese banks is negative. The agency acknowledges the progress made to end-H112 by the major Portuguese banks on capitalisation and retail funding but also recognises the challenges and risks ahead, which are still highly correlated with sovereign developments.

The Outlooks on the Long-Term Issuer Default Ratings (LT IDRs) of the major rated Portuguese banks are Negative. The LT IDRs of Caixa Geral de Depositos (CGD), Banco Comercial Portugues (Millennium bcp) and Banco BPI are at their Support Rating Floor (SRF) based on Fitch's assumption that the sovereign and/or international authorities would provide support if needed. The Negative Outlook mirrors that on the sovereign ('BB+'/Negative). Any further downgrade of Portugal's sovereign rating would trigger a downgrade of the major Portuguese banks' IDRs and SRFs.