Fitch, one of the leading global rating agencies, affirmed the long-term and short-term rating of Nova KBM at A-/F2. The outlook is stable.
Fitch stated that Slovenian banks' asset quality has deteriorated sharply, in particular driven by exposures to the construction sector and to holding companies, where leverage is generally high. Fitch believes further asset quality problems are likely in 2011, given ongoing weaknesses in the operating environment. However, the pace of asset quality deterioration should slow, in the agency's view, as loan books season and the economy returns to moderate growth. The agency forecasts a 1.9% expansion of GDP in 2011 after expected 1.1% growth in 2010. Fitch stated that Nova KBM suffered asset quality deterioration what is putting pressure on capital.
