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News Article | December 13, 2016
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Following a peer review, Fitch Ratings has affirmed Banesco Banco Universal, C.A.'s (BBU) foreign and local currency Issuer Default Ratings (IDRs) at 'CCC'. No Rating Outlook is assigned at this rating level. Fitch has also downgraded Banesco's Long-term National Rating to 'A(ven)' from 'A+(ven)' and its short-term National Rating to 'F1(ven)' from 'F1+(ven)'. A full list of rating actions follows at the end of this release. The downgrade of Banesco's national ratings reflects changing relativities and greater compression of bank ratings on the local scale, as well as increasing uniformity of performance amid shared operating challenges. Additionally, the downgrade also considers severe pressures on capitalization as internal capital generation has not kept pace with inflation induced asset growth. As such, Banesco's financial profile is now more in line with lower rated banks on the national scale in Venezuela. As with other emerging market commercial banks in highly speculative rating categories, the operating environment highly influences BBU's ratings. Like all Venezuelan banks, the sovereign's creditworthiness constrains BBU's ratings due to exposure to public sector (mostly sovereign) securities, as well as vulnerability to the government's economic and regulatory policy choices. Venezuela's IDR is currently rated 'CCC' by Fitch. High inflation distorts the comparison of financial metrics with regional peers (Latin American commercial banks with a Viability Rating [VR] of 'b+' and below). Capitalization also highly influences its credit profile. Like other Venezuelan banks, BBU's capital ratios have come under pressure as asset growth has exceeded internal capital generation since early 2014. At 6.7% as of Sept. 30, 2016, the bank's tangible common equity/tangible assets ratio lagged the system average though this was in line with other large private sector banks as of Sept. 30, 2016. Additionally, BBU has tighter reserve coverage of gross loans relative to its domestic peers. Fitch recognizes that an adjustment of foreign currency assets to a more market oriented exchange rate and a revaluation of fixed assets due to inflation would materially increase capitalization ratios. Nevertheless, in Fitch's view, this does not offset the inherent risk of operating in Venezuela given the depth of the economic crisis and the uncertainty in prospective regulatory measures. Capital ratios are likely to remain under pressure in 2017 due to inflation-induced growth and lower profitability. Given the bank's high level of liquid assets, the large negative mismatch between short-term assets and liabilities is manageable as long as domestic monetary market conditions remain liquid and any potential liberalization of capital controls is measured. Most liquid assets consist of cash and bank deposits (96% of total) and covered 34% of total deposits and short-term funding as of Sept. 30, 2016. Fitch views a greater proportion of cash favorably, as public sector securities may be of limited liquidity in a stress scenario given the shallow domestic debt market. Furthermore, cash and bank deposits accounted for 30% of BBU's total assets. Higher margins and rapid nominal loan growth was not sufficient to offset the drag of pressures from increased operating, credit and tax expenses in 2016. Though BBU's profitability in nominal terms was similar to other large private sector banks in Venezuela, it has dropped sharply. As is the case with other Venezuelan banks, Fitch expects expenditure pressures to continue over the medium term. BBU's impaired loans to gross loans ratio has remained below 1% since 2011, in line with domestic peers and reflecting the effect of inflation on the denominator. At 2.5% of gross loans as of Sept. 30, 2016, Fitch views coverage of gross loans as tight, given the severity and uncertainty of the current economic, social & political crisis and historical NPL levels following economic adjustment of previous crises. The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. Despite BBU's systemic importance, support cannot be relied upon given Venezuela's highly speculative rating and lack of a consistent policy on bank support. A downgrade of the sovereign's IDRs would result in a similar action on the IDRs and VRs of this bank, which is currently capped at the sovereign. A sustained decline in capitalization below regulatory minimums would also pressure BBU's ratings. Additional government intervention that pressures financial performance could negatively affect the bank's IDRs, VR and National ratings. While not Fitch's base case due to capital controls and high domestic market liquidity, a persistent decline in deposits would pressure ratings. There is no upside potential to the bank's ratings in the near term in light of the current economic crisis. Venezuela's propensity or ability to provide timely support BBU is not likely to change given the sovereign's very low speculative-grade ratings. As such, the SR and SRF have no upgrade potential. Fitch has taken the following rating actions on BBU: --Short-term foreign and local currency ratings affirmed at 'C'; Under Venezuelan banking regulation, compulsory loans are weighted at 50%. For the purposes of analyses and international peer comparison, Fitch adjusts the weightings of such loans to 100%. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001


News Article | December 13, 2016
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Following a peer review, Fitch Ratings has today affirmed Banco Occidental de Descuento, Banco Univeral C.A.'s (BOD) foreign and local currency Issuer Default Ratings (IDRs) at 'CCC'. No Rating Outlook is assigned at this rating level. A full list of rating actions is at the end of this release. The ratings were affirmed as there has been no material change in BOD's company profile or performance since the last review. As with other emerging market commercial banks in non-investment grade rating categories, the operating environment highly influences BOD's ratings. Like all Venezuelan banks, the sovereign's creditworthiness constrains BOD's ratings due to exposure to public sector (mostly sovereign) securities, as well as vulnerability to the government's economic and regulatory policy choices. Venezuela's IDR is currently rated 'CCC' by Fitch. High inflation distorts the comparison of financial metrics with regional peers (Latin American commercial banks with a Viability Rating [VR] of 'b+' and below). BOD's capitalization also highly influences its credit profile. Despite capital contributions in 2012 and 2013, stronger internal capital generation since 2014, and the full amortization of goodwill related to the Corp Banca merger in 2015, the bank's tangible common equity/tangible assets ratio has remained below 7% since 2013 due to rapid nominal asset growth. This ratio compares unfavorably to both domestic and Latin American peers. Furthermore, the bank's regulatory capital/risk weighted assets ratio stood at 12.1% at end-June 2016, very close to the minimum of 12% required in Venezuela. Fitch is concerned that these tight capital ratios will reduce BOD's financial flexibility and increase regulatory uncertainty for the bank. Given BOD's high level of liquid assets, the large negative mismatch between short-term assets and liabilities is manageable as long as domestic monetary market conditions remain liquid and any potential liberalization of capital controls is measured. Most liquid assets consist of cash and bank deposits (91% of total) and covered 31% of deposits and short-term funding as of Sept. 30, 2016. Fitch views a greater proportion of cash favorably, as public sector securities may be of limited liquidity in a stress scenario given the shallow domestic debt market. Even with reduced funding costs, the weight of increased credit costs and the additional burden on the bank's cost structure imposed by operating in a country with the highest inflation levels in the world as well as heavy regulation have made it difficult for BOD to maintain an improving trend in its profitability ratios. As a result, BOD's profitability ratios once again lag those of larger Venezuelan banks. As is the case with other Venezuelan banks, Fitch expects operating, credit and tax expenses to pressure profitability over the medium term. BOD has the weakest loan quality indicators among domestic peers (commercial banks with market shares exceed 5% of financial system assets). A growing proportion of retail and compulsory loans also increases the vulnerability of the bank's loan quality indicators to the current economic crisis. The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. Despite BOD's systemic importance, support cannot be relied upon given Venezuela's sub-investment grade rating and lack of a consistent policy on bank support. A downgrade of the sovereign's IDRs would result in a similar action on the IDRs and VRs of this bank, which is currently capped at the sovereign. A decline in capitalization below regulatory minimums would also pressure BOD's ratings. Additional government intervention that pressures financial performance could negatively affect the bank's IDRs, VR and National ratings. While not Fitch's base case due to capital controls and high domestic market liquidity, a persistent decline in deposits would pressure ratings. There is no upside potential to the bank's ratings in the near term in light of the current economic crisis. Venezuela's propensity or ability to provide timely support BOD is not likely to change given the sovereign's very low speculative-grade ratings. As such, the SR and SRF have no upgrade potential. Fitch has affirmed BOD's ratings as follows: --Short-term foreign and local currency ratings at 'C'; Under Venezuelan banking regulation, compulsory loans are weighted at 50%. For the purposes of analyses and international peer comparison, Fitch adjusts the weightings of such loans to 100%. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001


News Article | December 15, 2016
Site: www.businesswire.com

NEW YORK & SANTIAGO, Chile--(BUSINESS WIRE)--Fitch Ratings has conducted a portfolio review of selected Chilean banks after the Outlook revision of Chile's sovereign rating to Negative from Stable announced on Dec. 13, 2016 (see 'Fitch Affirms Chile at 'A+'; Revises Outlook to Negative' at www.fitchratings.com). This portfolio review included Chilean banks with Issuer Default Ratings (IDRs) or Viability Ratings (VRs) equivalent to the sovereign. Fitch believes that these ratings are more sensitive to a potential sovereign downgrade or any significant deterioration of the operating environment over the near term. No changes are expected in the national-scale ratings of these or other financial institutions in Chile derived from a potential downgrade of the sovereign. These ratings are local relative rankings of creditworthiness within a particular jurisdiction. Fitch does not expect these relativities to change in the event of a moderate downgrade in the sovereign rating. Consequently, Fitch has revised the Outlook on Banco del Estado de Chile (Banco Estado) and Banco Santander Chile's (BSC) Long-Term Foreign and Local Currency IDRs to Negative from Stable, and has affirmed the ratings for both banks. The Negative Outlook on Banco Estado's Long-Term IDRs mirrors the Long-Term IDR on Chile. Banco Estado's IDRs are aligned with Chile's sovereign Long-Term Foreign Currency IDR ('A+'/Outlook Negative) and Local Currency IDR ('AA-'/Outlook Negative) and are driven by the extremely high probability of support from its owner, the State of Chile. Banco Estado represents an important instrument of the state for developing credit and monetary policies, plays a strategic social role for the government and has systemic importance. These drivers also underpin its high Support Rating (SR) of '1' and Support Rating Floor (SRF) of 'A+'. Banco Estado's VR of 'bbb' is not affected by this rating action and reflects its strong market share, which places it as one of the strongest competitors in the Chilean banking system, being the third-largest bank measured by loans, and the first by deposits. Banco Estado's VR also reflects its sound funding structure based on a wide customer base, ample liquidity and lower, albeit moderately improving, credit quality, and is limited by its low capital base and its lower-than-peers' profitability. Banco Estado's senior unsecured foreign currency bonds are rated at the same level as the bank's IDR, considering the absence of credit enhancement or subordination feature. BSC's IDRs are driven by its VR of 'a+' and these do not factor in any extraordinary support from its parent, Banco Santander, although it does remain a strategically important subsidiary. The revision on the Outlook on BSC's Long-Term IDRs to Negative reflects the same rating action on the sovereign IDRs. BSC's IDRs and could be downgraded in the event of a downgrade of the sovereign's IDR, even if the bank's financials remain sound, as it is unlikely that the bank could be rated above the sovereign rating given its current financial profile. BSC's ratings are highly influenced by its market-leading position and its strong franchise within Chile. At September 30, 2016, BSC was the largest bank in Chile by total loans and deposits, with market shares of 19.5% and 18.9%, respectively. The ratings also consider the still favorable operating environment in Chile compared to its regional peers, which has supported its healthy asset-quality ratios, sound core profitability, diversified funding, and adequate capital position. At Sept. 30, 2016, BSC was the largest bank in Chile by total loans and the second largest by deposits. This underpins BSC's SR of '1' and SRF of 'A-', as there is an extremely high probability of state support, should it be needed. BSC's senior unsecured bonds are rated at the same level as the bank's IDR, considering the absence of credit enhancement or subordination feature. The Outlook for the Long-Term IDRs is Negative, the same as the Outlook for Chile's sovereign ratings. Changes in the bank's IDRs and SRF are contingent upon sovereign rating actions for Chile. Banco Estado's VR could be downgraded if its overall company profile deteriorates, if the Fitch Core Capital (FCC) ratio remains consistently below 7% and if its LLR coverage, including voluntary LLRs, falls and consistently remains below 100% of non-performing loans. Upward ratings potential for Banco Estado's VR would arise mainly from a significant and sustained improvement of its capitalization levels, with its FCC ratio improving and remaining above 9%. The ratings of Banco Estado's senior unsecured and subordinated debt are directly linked to the bank's IDR and National Rating and will move in line with rating actions on these ratings. BSC's IDRs and could be downgraded in the event of downgrade of the sovereign's IDR. Downward pressure for BSC's VR and IDRs could also arise from a considerable deterioration of the bank's company profile, which is not Fitch's baseline scenario, or form sustained pressure on its profitability or consistently lower capitalization. More specifically, BSC's VR could be downgraded if its operating profit/RWAs ratio consistently remains below 1.5%, or its FCC/RWAs ratio is sustained below 9%. There is limited upside potential in the near future for BSC's VR given the Negative Outlook on the sovereign. BSC's senior unsecured debt ratings are sensitive to changes in the bank's IDR. BSC's SRF could be affected by a downgrade of the sovereign's IDR. The bank's SR would also be affected by a change in the systemic importance of BSC, which is considered unlikely at the present time. For more information on Banco Estado and BSC's key rating drivers and sensitivities, please refer to their respective press releases published on Nov. 8, 2016 and available on www.fitchratings.com. Fitch has affirmed the following ratings: --Long-Term Foreign Currency IDR at 'A+'; Outlook revised to Negative from Stable; --Long-Term Local Currency IDR at 'AA-'; Outlook revised to Negative from Stable; --Long-Term Foreign and Local Currency IDRs at 'A+'; Outlook revised to Negative from Stable; Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.


News Article | December 13, 2016
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has upgraded Banco Nacional de Credito, C.A., Banco Universal's (BNC) National Long-Term Rating to 'BBB(ven)' from 'BBB-(ven)'. In addition, Fitch has affirmed BNC's Long-Term Issuer Default Rating (IDR) at 'CCC' and Viability Rating (VR) at 'ccc' following Fitch's peer review of Venezuelan banks. No Rating Outlook is assigned at this rating level. A full list of rating actions follows at the end of this release. Fitch's upgrade of BNC's National Long-Term Rating reflects the improved capitalization, stable asset quality and liquidity metrics that are more in line with its peers. Although these factors did not impact the IDR rating, which is constrained by the operating environment, they were deemed relevant enough to favorably impact the national ratings as the National Scale Credit Ratings are an assessment of credit quality relative to the rating of the lowest credit risk in a country. Fitch's upgrade of BNC's National Long Term Rating also reflects changing relativities and greater compression of bank ratings on the local scale, as well as increasing uniformity of performance amid shared operating challenges. The operating environment continues to be the key factor constraining BNC's VR, which drives its IDR and does not take into account state support. Like all Venezuelan banks, BNC's VR is strongly linked to the creditworthiness of the sovereign, given the significant level of government intervention, high level of exposure to sovereign securities and its vulnerability to the government's policy choices and the country's economic performance. BNC's ratings are also heavily influenced by the bank's capital, liquidity and funding profile. Although most deposits are available on demand, deposits have been stable, in part due to the government's capital controls. Furthermore, expansive fiscal and monetary policies continue to drive deposit growth, BNC has a large negative mismatch between short-term assets and liabilities, and access to longer-term funding is limited, as is the case across the Venezuelan banking system. Over the past three years, BNC's loan growth has consistently exceeded that of the system, and its exposure to the public sector was among the highest compared with other Venezuelan universal/commercial banks rated by Fitch. However, the bank's corporate focus, conservative lending policies and low-risk products have enabled the bank to report a low impaired loan to gross loan ratio, which compares favorably to its peers. The bank's reserves for impaired loans to gross loans improved to 2.2%; however, this level was still slightly below the average of the banking system at Sept. 30, 2016. In light of the loan concentration and difficult operating environment that continues to impact the bank's clients, Fitch views this reserve coverage level as weak. High nominal loan growth has led to tighter capitalization; however, this was mitigated by fresh capital injections. The bank's total regulatory capital ratio was slightly below the system's average although the bank's tangible common equity to tangible assets ratio was above that of the system. Capital levels are considered weak relative to Latin American peers in highly speculative countries, particularly in light of the low level of reserves compared with the size of the loan portfolio. BNC's profitability continued to lag that of its Venezuelan peers. Despite similar margins, the bank's lower efficiency and limited cross-selling hinders profitability. The bank's efficiency ratios were partly impacted by the bank's growth strategy. The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. Support cannot be relied upon given Venezuela's highly speculative rating and lack of a consistent policy on bank support. Should Venezuela's macroeconomic/political woes deepen, as reflected in its sovereign ratings, BNC's ratings could be downgraded. This is the main downside risk for BNC and the rest of Venezuela's banks. Although not Fitch's base case, BNC's VR, National and long-term IDRs could be upgraded if the operating environment improves (more stable economic background, less intrusive regulation) and the bank reduces its exposure to the public sector. A sustained improvement of the bank's financial profile could be positive for the bank's national ratings. Venezuela's propensity or ability to provide timely support of BNC is not likely to change given the sovereign's very low speculative-grade ratings. As such, the SR and SRF have no upgrade potential at this time. The rating actions are as follows: --Short-Term Foreign and Local Currency IDRs affirmed at 'C'; Under Venezuelan banking regulation, compulsory loans are weighted at 50%. For the purposes of analyses and international peer comparison, Fitch adjusts the weightings of such loans to 100%. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.


News Article | December 13, 2016
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NEW YORK--(BUSINESS WIRE)--Fitch Ratings has today affirmed Banco Exterior, C.A. Banco Universal's (Exterior) Long-Term Foreign and Local Currency Issuer Default Rating (IDR) at 'CCC'. Fitch has also affirmed Exterior's Viability Rating (VR) at 'ccc', Support Rating at '5' and Support Rating Floor at 'NF', following Fitch's peer review of Venezuelan Private Sector Banks. No Rating Outlook has been assigned at this rating level. The downgrade of Exterior's National Long-term rating to 'A(ven)' from 'A+(ven)' reflects changing relativities in the local market. A full list of rating actions follows at the end of this release. Exterior's international ratings are significantly constrained by the weak operating environment, characterized by a persistent economic contraction, severe macroeconomic imbalances, lack of adequate government policy response and high inflation (which Fitch projects at 339.9% for 2016). Inflation-led asset growth (averaging 64% annually from 2012 to 2015) has put increasing pressure on tangible common equity compared to tangible assets (6.1% at September 2016), as evident throughout the banking system. Exterior's regulatory capital ratio was 12.8% at August 2016, in line with the average for the country's largest private banks. Exterior's ratings also consider the bank's significant reliance on short-term deposit funding, in line with the banking system as a whole. The mismatch of Exterior's short- term liabilities with short-term assets, and Exterior's liquidity, remains adequate given the capital controls in place. Exterior's loan quality ratios are stable, supported by inflation-led loan growth. Reserve coverage exceeded 700% of impaired loans at June 2016, comparing favourably to regional peers, but below the local banking system average. In context of the current economic crisis, Exterior's significant holdings of public sector securities (71.3% of equity at September 2016) would be a source of concern in the event of a forced economic adjustment. This is mitigated by its minimal exposure to USD denominated public sector securities, with the exception of relatively small USD6.3 million investments in local currency securities with foreign exchange hedge features. The bank's nominal profitability also demonstrates stability, but should be seen in light of high inflation as unchanging regulatory interest rate caps and floors has pressured profits in real terms. Fitch's downgrade of Exterior's National Long-term Rating reflects changing relativities and greater compression of bank ratings on the local scale, as well as increasing uniformity of performance amid shared operating challenges. Exterior's national ratings also reflect its position as the ninth largest bank by assets (six largest private bank) with a mid-sized franchise focused on serving small and medium-sized enterprises. It is majority owned by the Spanish banking group, Grupo Bancario IF. The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. Support cannot be relied upon given Venezuela's highly speculative rating and lack of a consistent policy on bank support. The bank's IDRs, VR and National ratings have limited upside potential in the near term in light of the current economic crisis. Exterior's ratings are constrained by the sovereign and sensitive to a change in the sovereign's ratings. In addition, while not Fitch's base case due to capital controls in place, a persistent decline in deposits would pressure ratings. Venezuela's propensity or ability to provide timely support Exterior is not likely to change given the sovereign's very low speculative-grade ratings. As such, the SR and SRF have no upgrade potential. The rating actions are as follows: --Short-term Foreign and Local Currency IDRs affirmed at 'C'; Under Venezuelan banking regulation, compulsory loans are weighted at 50%. For the purposes of analyses and international peer comparison, Fitch adjusts the weightings of such loans upwards to 100%. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001


News Article | December 13, 2016
Site: www.businesswire.com

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed The Goldman Sachs Group, Inc.'s (Goldman) Long-Term and Short-Term Issuer Default Ratings (IDRs) at 'A/F1', and its Viability Rating (VR) at 'a'. The Rating Outlook is Stable. The rating affirmations have been taken in conjunction with Fitch's periodic review of the Global Trading and Universal Banks (GTUBs). Fitch's affirmation of Goldman's ratings and the maintenance of the Stable Outlook reflect the company's strong franchise, differentiated risk management culture, strong capital ratios, and solid liquidity position. Rating constraints include Fitch's view of the cyclicality of the company's business model and higher reliance on wholesale funding than some peer institutions. In addition, Fitch has assigned Derivative Counterparty Ratings (DCRs) to Goldman Sachs Group and to Goldman Sachs & Co., and Goldman Sachs International as the entities have material derivatives activities as part of its roll out of DCRs to significant derivative counterparties in Western Europe and the U.S. DCRs are issuer ratings and express Fitch's view of banks' relative vulnerability to default under derivative contracts with third-party, non-government counterparties. The DCR of each entity is equalized with each entity's Long-Term IDR. Goldman's investment banking franchise continues to be very strong and has consistently ranked near the top of league tables. Fitch believes that this positioning garners the company small price premiums in what is a very competitive marketplace. Goldman's ratings benefit from a strong market share in advisory though results may be slower than in prior years. Additionally, Fitch expects underwriting net revenue to remain good, particularly as Goldman continues to focus on growing its market share in debt underwriting. While Goldman has a strong market position in many trading businesses, it is also noteworthy that results from trading are variable in nature. For example, over the last year Goldman's trading businesses have exhibited volatility driven largely by marketwide weakness in the Fixed Income, Currency, and Commodities (FICC) segment during the first two quarters 2016. However, in the third quarter of 2016 (3Q16), Goldman and other peer banks benefited from higher volumes in many of their FICC businesses, which drove improved results. This volatility has been in part mitigated by cost reduction measures over the last year. Goldman's annualized return on equity (ROE) in 3Q16 was 11.2% due to the factors noted above; pulling up the company's annualized ROE over the first nine months of the year to 8.7%, which is still below Goldman's long-term averages. Performance over the course of this past year highlights the degree to which Goldman's capital markets revenues are influenced by market conditions and client confidence to transact, implying a higher inherent cyclicality to Goldman's core activities relative to some other more broadly diversified peer institutions, which creates some limitation on Goldman's upward rating potential. Goldman's capital ratios remain good, with the company's fully phased-in Basel III Common Equity Tier 1 (CET1) ratio at 11.9% at 3Q16. Goldman's Fitch Core Capital (FCC) ratio as of 3Q16 was 12.3%. Goldman's reported CET1 is inline with GTUB peer medians, which Fitch views as appropriate and supportive to the ratings. Goldman's ratings also incorporate the company's more significant reliance on wholesale funding than most other GTUBs, whose funding profiles are typically core in nature and skewed to a larger proportion of low-cost and sticky retail deposit funding. Fitch would note, however, that in April 2016 Goldman closed on the purchase of General Electric's online deposit platform, which added $16 billion of deposits to the balance sheet and should provide an avenue for future deposit growth. That said, as of 3Q16, deposits constituted only 15.7% of total liabilities, below the proportion of many peer institutions. Notably, Goldman is using some of its growing deposit funding for its recently launched consumer lending platform, "Marcus By Goldman." This product is Goldman's first foray into consumer lending, although Fitch expects the level and growth of these consumer loans to be very measured. Fitch does not expect this segment to be a meaningful rating driver for some time given its small size. Fitch views Goldman's overall liquidity position as conservative. Goldman's Global Core Liquid Assets (GCLA) increased to a solid $214 billion, or 24.3% of total assets at 3Q16 up from $199 billion or 23.1% of total assets at year-end (YE) 2015. Fitch has assigned a derivative counterparty rating (DCR) to Goldman's parent company, its main U.S. broker-dealer Goldman Sachs & Co. (GSCO) and its main international broker-dealer Goldman Sachs International (GSI). The DCR for the parent, GSCO, and GSI is equalized with Goldman's IDR for each entity reflecting Fitch's view that derivative counterparties to Goldman will rank equally to other senior unsecured creditors. Subordinated debt and other hybrid capital issued by Goldman are all notched down from the VR in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profile, which vary considerably. Subordinated debt issued by the operating companies is rated at the same level as subordinated debt issued by Goldman, reflecting the potential for subordinated creditors in the operating companies to be exposed to loss ahead of senior creditors in Goldman. Goldman's subordinated debt is rated one-notch below Goldman's VR, its preferred stock is rated five notches below the VR (which encompasses two notches for non-performance and three notches for loss severity), and its trust preferred stock is rated four notches below the VR (encompassing two notches for non-performance and two notches for loss severity). U.S. deposit ratings of Goldman Sachs Bank USA (GSBUSA) are one-notch higher than senior debt ratings of GSBUSA reflecting the deposits' superior recovery prospects in case of default given depositor preference in the U.S. Goldman Sachs International Bank's (GSIB) deposit ratings are at the same level as their senior debt ratings because their preferential status is less clear and disclosure concerning dually payable deposits makes it difficult to determine if they are eligible for U.S. depositor preference. The Long-Term IDR of GSBUSA benefits from an institutional Support Rating of '1', which indicates Fitch's view that the propensity of the parent company to provide capital support to the operating subsidiaries is extremely high. Additionally, the Long-Term IDRs for the material U.S. operating entities, GSBUSA and the main broker dealer Goldman Sachs & Co. (GSCO) are rated one-notch above Goldman's Long-Term IDR to reflect Fitch's belief that the U.S. single point of entry (SPOE) resolution regime, the likely implementation of total loss absorbing capacity (TLAC) requirements for U.S. global systemically important banks (G-SIBs), and the presence of substantial holding company debt reduce the default risk of these domestic operating subsidiaries' senior liabilities relative to holding company senior debt. Additionally, the 'F1' Short-Term IDR of GSBUSA is at the lower of the two potential Short-Term IDRs which map to an 'A' Long-Term IDR on Fitch's rating scale, in order to reflect the company's greater reliance on wholesale funding than more retail-focused banks. Goldman's main broker-dealer, GSCO's Short-Term IDR of 'F1' reflects the view that there is less surplus liquidity at this entity, particularly given its greater reliance on the holding company for liquidity. The senior secured debt ratings of GSCO are equalized with the IDR of the entity as Fitch does not have on-going visibility into the collateral underlying the notes. Goldman Sachs International (GSI) and GSIB are wholly owned subsidiaries of Goldman whose IDRs and debt ratings are aligned with the bank holding company's ratings because of their core strategic role in and integration into Goldman. Fitch revised the entities' Positive Outlooks to Stable since further clarity on host country internal TLAC proposals continues to be delayed. At this time, it remains unclear whether the IDRs will benefit from sufficient junior debt buffers at these entities. The senior secured debt rating of GSI is equalized with the IDR of the entity as Fitch does not have on-going visibility into the collateral underlying the notes. The Support Rating (SR) and Support Rating Floor (SRF) for Goldman reflect Fitch's view that senior creditors cannot rely on receiving extraordinary support from the sovereign in the event that Goldman becomes non-viable. In Fitch's view, implementation of the Dodd Frank Orderly Liquidation Authority legislation has now sufficiently progressed to provide a framework for resolving banks that is likely to require holding company senior creditors to participate in losses, if necessary, instead of or ahead of the company receiving sovereign support. As previously noted, GSBUSA has a SR of '1', which reflects Fitch's view of an extremely high probability of institutional support for the entity. GSBUSA does not have a VR at this time, given Fitch's view of its more limited role within the group structure. In Fitch's view, Goldman's VR is solidly situated at its current rating level. However, to the extent that the company is able to further improve both its returns on equity and the stability of its earnings profile while at the same time further reducing its reliance on wholesale funding and maintaining above-peer-level capital ratios, there could be some longer-term upside to the company's ratings. That said, ratings are likely limited to the 'A' rating category reflecting the cyclicality of many of Goldman's business activities and its primary reliance on wholesale, confidence-sensitive funding sources. Downward pressure on the VR could result from a material loss, significant increase in leverage, or deterioration in funding and liquidity levels. Similarly, any unforeseen outsized or unusual fines, settlements or charges levied could also have adverse rating implications, particularly if permanent franchise damage is incurred as a result. Additionally, any sizable risk management failure could result in negative pressure on Goldman's ratings. Additionally, and while not expected, to the extent that the company's operating performance, as measured by return on equity, is below peers or the company's historical averages for an extended period this could ultimately lead to negative ratings pressure over a longer-term time horizon. Fitch notes that Goldman, GSCO, and GSI's long-term IDR, senior debt and DCR are equalized with the VR at the holding company. Thus Goldman's IDR, senior debt ratings and DCR would be sensitive to any changes in Goldman's VR. DCRs are primarily sensitive to changes in the respective issuers' Long-Term IDRs. In addition, they could be upgraded to one notch above the IDR if a change in legislation (for example as recently proposed in the EU) creates legal preference for derivatives over certain other senior obligations and, in Fitch's view, the volume of all legally subordinated obligations provides a substantial enough buffer to protect derivative counterparties from default in a resolution scenario. As noted, GSBUSA carries an institutional support rating of '1', as Fitch believes support from the parent would be extremely highly likely. Additionally, GSBUSA and GSCO's long-term IDRs are rated one-notch higher than the parent holding company's IDR because each subsidiary benefits from the structural subordination of holding company TLAC, which effectively supports senior operating liabilities of each subsidiary. Any change in Fitch's view on the structural subordination of TLAC with respect to GSBUSA and GSCO could also result in a change to each entity's Long-Term IDR. Following the Rating Outlook revision to Stable, GSI and GSIB's ratings are sensitive to the same factors that might drive a change in Goldman's VR. Subordinated debt and other hybrid ratings are primarily sensitive to any change in Goldman's VR and secondarily to a change in Fitch's recovery expectations for such instruments. GSBUSA's deposit ratings are sensitive to any change in the entity's Long-Term IDR which is sensitive to any change in the VR of the parent company given the institutional support rating of '1'. Thus, deposit ratings are ultimately sensitive to any change in Goldman's VR or to any change in Fitch's view of institutional support for GSBUSA. GSIB's deposit ratings are sensitive to any change in its Long-Term IDR which is sensitive to any change in the VR of the parent company given that Fitch has equalized the long-term IDR of GSIB with that of the parent company given its core nature in Goldman's operations. SRs and SRFs would be sensitive to any change in Fitch's view of support. However, since these ratings were downgraded to '5' and 'No Floor', respectively, in May 2015, there is unlikely to be any change to these ratings in the foreseeable future. GSBUSA's institutional support rating of '1' is sensitive to any change in Fitch's views of potential institutional support for this entity from the parent company. Fitch has affirmed the following ratings: Fitch has affirmed the following ratings and revised the Rating Outlook to Stable from Positive: --Long-term IDR at 'A' Outlook revised to Stable from Positive; --Long-Term IDR at 'A' Outlook revised to Stable from Positive; Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. 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News Article | November 29, 2016
Site: www.greentechmedia.com

Guardian: French Nuclear Power in 'Worst Situation Ever,' Says Former EDF Director The French nuclear industry is in its “worst situation ever” because of a spate of plant closures in France and the complexities it faces with the reactor design for the U.K.’s Hinkley Point C power station, according to a former Électricité de France director. Gérard Magnin, who called Hinkley “very risky” when he resigned as a board member over the project in July, argued that the situation for the state-owned EDF had deteriorated since he stepped down, with more than a dozen French reactors closed over safety checks and routine maintenance. The closures have seen Britain this week exporting electricity to France for the first time in four years. Behind the covered windows of a nondescript two-story building near the Olympia Regional Airport, hundreds of marijuana plants were flowering recently in the purple haze of 40 LED lights. It was part of a high-stakes experiment in energy conservation -- an undertaking subsidized by the local electric company. With cannabis cultivation poised to become a big business in some parts of the country, power companies and government officials hope it will grow into a green industry. The plants here, destined for sale in the form of dried flowers, joints or edible items, were just a few weeks from harvest and exuding the potent aroma of a stash room for the Grateful Dead. But the energy-efficient LED lights were the focus of attention. “We wanted to find a way to save energy -- that was important to us,” said Rodger Rutter, a retired airline pilot who started this indoor pot-farming business, Evergrow Northwest, after Washington state legalized recreational cannabis in 2012. Business Insider: Here’s the Stunning Electric Car Porsche Is Making to Take On Tesla Tesla will soon be getting some serious competition. Porsche is doubling down on its electric car efforts and plans to roll out its first fully electric vehicle, dubbed the Mission E, by 2020. In fact, Porsche, which is a subsidiary of Volkswagen, plans to sell about 20,000 models of its Mission E a year, according to a report by the German news site Automobilwoche published Sunday. Fortune: Swiss Reject Plan to Speed Up Exit From Nuclear Energy Swiss voters rejected a plan to force their government to accelerate the country’s exit from nuclear energy in a referendum Sunday, turning down an initiative that would have seen the last plant shut in 2029. A majority of cantons (states) voted against the plan. Under Switzerland’s direct democracy system, proposals need a majority of both cantons and votes to pass. The plan promoted by the Green party would have meant closing three of Switzerland’s five nuclear plants next year, with the last shutting in 2029. Polls ahead of the referendum had shown a tight race, but a projection for SRF public television showed the initiative failing by a clear margin of 55% to 45%. PV-Tech: How Do You Spend Almost $400 Million on R&D? At the beginning of August, major PV inverter manufacturer Sungrow Power Supply Co. raised around $400 million in new capital via a private placement of shares with multiple Chinese banks. Significantly, Sungrow said that the capital raised would enable it to increase investment in R&D and “deepen the company’s focus on innovation related to its PV inverter and energy storage line-ups." To put the $400 million raised into some numerical perspective, Sungrow had generated revenue in 2015 of around $703 million, some 49% higher than in the previous year. In the first half of 2016, the company reported, coincidentally, revenue of around $366 million, while it had allocated around $16 million to R&D in the first half of 2016.


News Article | March 1, 2017
Site: www.prnewswire.com

DALLAS, March 1, 2017 /PRNewswire/ -- The Cushing® Energy Income Fund (formerly known as the Cushing® Royalty & Income Fund) (NYSE: SRF) declared a distribution for March 2017 of $0.04 per common share. The Fund's distribution will be payable on March 31, 2017 to shareholders of...


News Article | February 15, 2017
Site: globenewswire.com

Results for the fourth quarter and full year 2016 2016: a year of construction, acceleration of growth and good financial performance in all business lines The Group's fourth quarter results reflect strong business momentum in Retail banking's branch networks, the specialised subsidiaries and the Large customers business line. Profitability remained high thanks to tight cost control and a firm grip on the cost of risk, which remains at a low level. Net income Group share for 2016 was 4,825 million euros stated and 6,353 million euros underlying[4], including 1,648 million euros in the fourth quarter. This result made a significant contribution to strengthening the fully-loaded Common Equity Tier 1 ratio by +0.8 point in 2016 to 14.5%, among the best in the sector and well above the regulatory requirements. 2016 was the first year of the new "Strategic Ambition 2020" medium-term strategic plan. The plan, which was unveiled in March 2016, is built on four priorities: The Group has already made tangible progress in achieving those objectives: Organic growth was also boosted significantly in the fourth quarter by Amundi's agreement to acquire Pioneer Investments for 3.5 billion euros. This transaction is fully in line with the Group's strategy set out in the Medium Term Plan whereby organic growth of the asset management business may be accelerated by value-creating acquisitions that meet Amundi's financial criteria (10% return on investment in three years). As part of the rights issue made by Amundi to finance the acquisition, Crédit Agricole Group has decided to reduce its holding in Amundi to 70% (versus 75.7% currently) by selling its subscription rights in order to improve Amundi's free float and share price. On that basis, the impact of the acquisition on Crédit Agricole Group's fully-loaded CET1 ratio would be -37 basis points. In full year 2016, Crédit Agricole Group's stated net income Group share was 4,825 million euros versus 6,043 million euros in 2015. Excluding specific items[5] of -1,527 million euros in 2016 versus only -121 million euros in 2015, underlying net income Group share came to 6,353 million euros a year-on-year increase of +3.1% compared with 6,164 million euros in 2015. In the fourth quarter of 2016, Crédit Agricole Group's stated net income Group share came to 671 million euros versus 1,564 million euros in the fourth quarter of 2015. Excluding specific items1 of -977 million euros this quarter versus +59 million euros in the fourth quarter of 2015, underlying net income Group share came to 1,648 million euros, an increase of +9.5% compared with the same quarter of last year. Despite the increase in eurozone long rates in the second half of the quarter, interest rates nonetheless remain very low and even negative at the short end of the curve, which continued to put pressure on the interest margin in intermediation activities, particularly in Retail banking in France and Italy. The continued fall in interest rates at the beginning of the fourth quarter, which lasted until the Presidential elections in the United States, triggered a new wave of loan renegotiations, especially in France in the LCL network. However, this pressure on interest margins continued to be offset by good business momentum in all the Group's business lines and networks, which led to a slight year-on-year increase of +0.7% in underlying1 revenues in the fourth quarter. The -34% decrease in cost of credit risk to 457 million euros coupled with a massive +88.3% increase in the contribution from equity-accounted entities to 111 million euros more than offset the +3.3% year-on-year increase in operating expenses in the fourth quarter. As in previous quarters, cost of risk relative to outstandings[6] remained low at 28 basis points. Underlying pre-tax income increased by +8% year-on-year in the fourth quarter, excluding specific items1 for both comparative periods, and in particular the LCL goodwill impairment charge of -540 million euros in the fourth quarter of 2016 and the provision for legal risk of -150 million euros in the fourth quarter of 2015. The Regional Banks continued to enjoy buoyant business momentum both in lending (up +4.4% in 2016) and customer assets (up +4.0%). Home loans and consumer loans (up +6.5% and +9.3% respectively) grew faster in the twelve months to end-December 2016 than in the twelve months to end-September 2016, as did demand deposits (up +15.8%). The strong momentum in personal and property insurance continued. This commercial performance of the Regional Banks made a significant contribution to growth in Crédit Agricole S.A.'s business lines, many of whose products they distribute as the Group's leading distribution channel. As in the previous quarter, revenues of the Regional Banks were affected in the fourth quarter by the impacts of the operation to simplify the Group's structure. Excluding both those impacts (-174 million euros) and home purchase savings provisions (-194 million euros), revenues rose by +3.1% compared with the fourth quarter of 2015, with interest income stable and fee and commission income up +6.2% on the same basis. In all, the Regional Banks' contribution to Crédit Agricole Group's underlying net income Group share was 707 million euros in the fourth quarter and 3,090 million euros for full year 2016. It should be noted that a tax charge of -301 million euros was recognised in the fourth quarter of 2016, corresponding to the Regional Banks' share of the revaluation of deferred taxes maturing in or after 2020 at the standard corporate income tax rate of 28.9% that will apply as of that date (versus 34.4% currently) in accordance with the 2017 Finance law. This charge affects stated net income but is restated as a specific item and therefore does not affect underlying1 net income. The performance of the other Crédit Agricole Group business lines is described in the section of the press release on Crédit Agricole S.A. During the quarter, Crédit Agricole Group further improved its financial solidity, with a fully-loaded Common Equity Tier 1 ratio, of 14.5% at end-December 2016, an increase of +80 basis points compared with end-December 2015 and +10 basis points compared with end-September 2016. This ratio provides a substantial buffer above the distribution restriction trigger applicable as of 1 January 2019, set at 9.5% by the ECB. The estimated TLAC ratio was 20.3% at 31 December 2016, excluding eligible senior preferred debt.  The minimum 2019 requirement of 19.5% is thus already respected, even as the regulatory calculation of this ratio allows for the inclusion of eligible senior preferred debt (up to 2.5%). This ratio includes the issue, in December 2016, of a new category of debt, senior non-preferred debt, in the amount of 1.5 billion euros and with a maturity of 10 years, which can absorb losses prior to the senior debt hitherto issued by the Group; the latter debt will continue to be issued under the name of "senior preferred debt". This inaugural issue in December, in euros, was followed in early January 2017 by two US dollar denominated issues: a double-tranche 5 year/fixed and floating rate issue (for 1.3 billion US dollars in total) and a 10 year fixed rate issue (1 billion US dollars), also constituting the first issues of this new category of debt in US dollars.  These issues were rated Baa2 (Moody's) / BBB+ (S&P) / A (Fitch Ratings). They all met great success, with extensive order books. The phased-in leverage ratio was 5.7%[7] up +20 basis points compared with end-September 2016. The liquidity position of Crédit Agricole Group is solid. The banking cash balance sheet of the Group, amounting to 1,085 billion euros at 31 December 2016, showed a surplus of stable resources over applications of funds of 111 billion euros, up +3 billion euros compared with end-December 2015 and +7 billion euros compared with end­September 2016. It exceeded the Medium Term Plan target of over 100 billion euros. Liquidity reserves, including valuation gains and haircuts related to the securities portfolio, amounted to 247 billion euros, covering more than three times over gross short term debt. The issuers of Crédit Agricole Group issued on the market the equivalent of 33.1 billion euros of debt in 2016. In addition, Crédit Agricole Group placed bond issues amounting to 7.4 billion euros in its retail networks (Regional Banks, LCL, Cariparma) in 2016. Commenting on these results and the Group's business trends in 2016, Dominique Lefebvre, Chairman of Crédit Agricole S.A.'s Board of Directors and Chairman of SAS Rue La Boétie, said: "2016 was a key year in Crédit Agricole Group's transformation. The successful drive to simplify the Group's structure and the promising start made by our new Strategic Ambition 2020 plan provide a firm platform supporting Crédit Agricole's future development". Crédit Agricole S.A.'s Board of Directors, chaired by Dominique Lefebvre, met on 14 February 2017 to examine the financial statements for the fourth quarter and full year 2016. In the fourth quarter of 2016, stated net income Group share came to 291 million euros. Specific items1 reduced net income Group share by -612 million euros this quarter. Apart from the issuer spread (+66 million euros impact on net income Group share) and a restructuring charge related to the Cariparma Group's adjustment plan to adjust its branch network in Italy (­-25 million euros in net income Group share), there were two significant items in the fourth quarter: These charges have no impact on capital ratios (negligible for the deferred tax revaluation) liquidity, or on the dividend. Excluding these specific items, underlying net income Group share came to +904 million euros, an increase of +52.6% compared with the fourth quarter of 2015. These excellent underlying results were driven by strong commercial momentum in all Crédit Agricole S.A.'s business lines and distribution networks, as well as the Regional Banks which distribute their products. Underlying revenues were up +10.9% year-on-year in the fourth quarter of 2016. This very good performance was boosted by excellent control over costs, up by only +0.8% compared with the fourth quarter of 2015, coupled with a -15.0% decrease in cost of credit risk to a very low level of 41 basis points of outstandings[10]. This level has been stable over the last three quarters and compared with the fourth quarter of 2015, and remains below the Medium Term Plan assumption of 50 basis points. Activity was buoyant in all business lines: Underlying revenues, excluding specific items[12], increased by +10.9% or +441 million euros year-on-year in the fourth quarter to 4,480 million euros. Only Retail banking (with a very moderate decrease of -48 million euros) did not contribute to revenue growth due to the low interest rate environment. The other business lines all delivered significant growth in underlying revenues3, particularly Asset gathering (up +12.9% or +148 million euros compared with the fourth quarter of 2015) and Large customers (up +12.2% or +137 million euros), while the Corporate Centre benefited from the positive recurring effects of the plan to simplify the Group's structure (revenues up +227 million euros compared with the fourth quarter of 2015). It should be noted that despite pressure on intermediation margins due to the low interest rate environment in the eurozone, Retail banking in France (LCL) and Italy showed good resilience. LCL even delivered a slight year-on-year increase of +0.4% in fourth-quarter underlying3 revenues excluding home purchase savings provisions. This was more than offset by the decrease in Italy, which was nonetheless contained to -1.7%, and a decrease in International retail banking excluding Italy due to the currency effect. Underlying3 operating expenses remained under control in all business lines, with a very limited year-on-year increase of +0.8% or +24 million euros in the fourth quarter, mainly due to investments in Asset gathering and Specialised financial services, coupled with a low base for comparison in the fourth quarter of 2015 for the Corporate Centre. The decrease in Retail banking operating expenses (down -4.7% or -51 million euros) offset the decrease in underlying revenues in this business line (down -48 million euros). Cost of credit risk remained well controlled at a low level, amounting to 395 million euros, down -15.0% compared with the fourth quarter of 2015. This corresponds to 41 basis points of consolidated outstandings[13], stable compared with the fourth quarter of 2015 and the third quarter of 2016. It has fallen for eight consecutive quarters in Retail banking in Italy (93 basis points), has increased very slightly in consumer finance (140 basis points) due to tighter provisioning rules introduced following the recovery in activity, and remains low for LCL (17 basis points) and the Large customer business line's Financing activities (27 basis points), although in both cases it is up slightly compared with a very low base for comparison in the fourth quarter of 2015. Thanks to these positive trends, underlying[14] pre-tax income rose by +72.3% to 1,275 million euros. The underlying2 tax charge, excluding the deferred tax effect, increased by +283 million euros in the fourth quarter of 2016 compared with a particularly low charge of 46 million euros in the fourth quarter of 2015. The increase in underlying2 net income Group share, at +52.6%, was therefore slightly lower than the increase in pre-tax income. In full year 2016, stated net income Group share was 3,541 million euros. Other than the fourth-quarter specific items1 referred to above, this figure includes the gain recognised relative to the transaction to simplify the Group's structure for 1,254 million euros, net of transaction-related costs and tax, and the refunding cost adjustment at LCL for -187 million euros after tax; these two items were recognised in the third quarter. It also includes the +327 million euros gain on the disposal of Visa shares recognised in the second quarter of 2016, the cost of the liability management transactions in the first quarter for -683 million euros, and other more minor specific items. Excluding all specific items in 2016, underlying net income Group share amounted to 3,137 million euros, a year-on-year increase of +22.8%. At end-December 2016, Crédit Agricole S.A.'s capital ratios were further strengthened. The fully-loaded Common Equity Tier 1 stood at 12.1%, an increase of +140 basis points compared with end-December 2015 and +10 basis points compared with end-September 2016. The improvement was due to the quarter's distributable net income (+24 basis points) and the capital increase reserved for employees in December 2015 (+8 basis points), offset by a fall in unrealised gains on available-for-sale securities (-16 basis points). Risk-weighted assets remained stable over the quarter at 301 billion euros. The phased-in leverage ratio stood at 5.0%[15] at end-December 2016 as defined in the Delegated Act adopted by the European Commission, representing an improvement of +30 basis points compared with end-September 2016. The LCR ratio of Crédit Agricole S.A. and of the Group remained in excess of 110% at end-2016. At 31 December 2016, Crédit Agricole S.A. had completed 108% of its medium-to long-term market funding programme (senior and subordinated debt) of 14 billion euros. It had raised the equivalent of €12.2 billion euros of senior preferred debt and 2.9 billion euros equivalent of subordinated and senior non-preferred debt. *              * * Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A., commented: "Crédit Agricole S.A. performed well in 2016 as a result of further strong top-line momentum across all its business lines, plus a tight grip on its costs and its risk. These encouraging results have laid the groundwork for the introduction of a normalised dividend policy and reinforced our confidence in our ability to achieve the targets of the Strategic Ambition 2020 plan for the benefit of our customers." At the COP21 in Paris in December 2015, the Group reaffirmed its position as leader in financing the energy transition (renewables, energy efficiency and green transport) and its commitment to the fight against climate change through new quantified objectives. At end-December 2016, the Group was well on the way to achieving those objectives: In addition, for the fifth consecutive year, Crédit Agricole S.A. has published the results of its "FReD index", which measures progress made by the Group during the year in more than 150 sustainability actions. The 2016 index is 2.2 as audited by PricewaterhouseCoopers, compared with an initial target of 2. Thirteen entities[16] have committed to the FReD approach and three International retail banking subsidiaries[17] are currently testing it. Crédit Agricole S.A. ranks 17th in the Global 100, which comprises the 100 most sustainable companies in the world, identified by Canadian magazine Corporate Knights. Global 100 was created in 2005 and is published each year at the World Economic Forum in Davos. Some 4,000 companies are analysed on the basis of about fifteen performance measures (energy efficiency, resource use, innovation, taxes paid, employee turnover, management gender balance, executive compensation, etc.). Crédit Agricole S.A. is the second highest ranked French company in the 2017 Global 100 behind Dassault Systèmes, which ranks 11th. It is also the fifth highest ranked bank in the world (behind a Norwegian, Danish, Dutch and Australian bank) and top ranking French bank. Crédit Agricole S.A. is a member of the main international sustainability indices. It has been a member of the FTSE4Good Global 100 and Europe 50 since 2004, and of the NYSE Euronext Vigeo Eiris Eurozone 120 and Vigeo Eiris Europe 120 since 2013. It became a member of the STOXX Global ESG Leaders in 2014 and of Oekom Prime in 2015. In 2016, Crédit Agricole S.A. was among the top rated banks by the Carbon Disclosure Project (CDP) for its climate change policy. 11 May 2017                       Publication of 2017 first quarter results 3 August 2017                     Publication of second quarter and first half 2017 results Disclaimer This presentation may include prospective information on the Group, supplied as information on trends. This data does not represent forecasts within the meaning of European Regulation 809/2004 of 29 April 2004 (chapter 1, article 2, §10). This information was compiled from scenarios based on a number of economic assumptions for a given competitive and regulatory environment. Therefore, these assumptions are by nature subject to random factors that could cause actual results to differ from projections. Likewise, the financial statements are based on estimates, particularly for the calculation of market values and asset impairments. Readers must take all of these risk factors and uncertainties into consideration before making their own judgement. The figures presented for the twelve-month period ended 31 December 2016 have been prepared in accordance with IFRS as adopted in the European Union and applicable at that date, and with prudential regulations currently in force. The Statutory Auditors' audit work on the financial consolidated statements is underway. Throughout the document, data on 2015 results is presented pro forma: transfer of CACEIS from Asset Gathering to Large Customers, transfer of Insurance Switch from the Corporate Centre to Insurance and reclassification of the contribution of the Regional Banks under IFRS5. Within Crédit Agricole S.A., "Retail banking" now covers only LCL and International retail banking. In the fourth quarter of 2016, revenues amounted to 4,580 million euros, including the usual accounting restatements (mainly revaluation of debt for the quarter, DVA running and loan hedges) totalling +99 million euros. Excluding these specific items[18], underlying revenues amounted to 4,480 million euros, an increase of +10.9% or 441 million euros compared with the fourth quarter of 2015. Operating expenses rose by just +0.8% to 2,930 million euros year-on-year in the fourth quarter, excluding specific items, i.e. a 51 million euros charge relating to the Cariparma Group's adjustment plan recognised by Retail banking in Italy. Thanks to these highly contrasting and favourable trends in underlying revenues and operating expenses1, the cost/income ratio improved by 6.5 percentage points compared with the fourth quarter of 2015, to 65.4%. Cost of credit risk (i.e. excluding the 150 million euros legal provision recognised in the fourth quarter of 2015) was 395 million euros, down -15.0% year-on-year. Cost of risk relative to outstandings was 41 basis points[19], stable year-on-year and quarter-on-quarter. This is lower than the Medium-Term Plan assumption of 50 basis points in 2019. Impaired loans[20] amounted to 15.6 billion euros and represented 3.5% of gross outstanding customer and interbank loans, down by -0.3 billion euros or 0.1 of a percentage point compared with end-September 2016. The ratio of impaired loans covered by specific reserves was 52.1% versus 51.9% at end-September 2016. Including collective reserves, the impaired loan coverage ratio was 67.7%, stable compared end-September 2016. Share of net income from equity-accounted entities grew more than threefold (3.4x), mainly due to strong growth in car partnerships in consumer finance and a very low base for comparison in the fourth quarter of 2015 resulting from the 76 million euros write-down by Crédit Agricole CIB (Large customers) of its interest in UBAF. Thanks to these positive trends, underlying pre-tax income rose by +72.3% to 1,275 million euros. The underlying tax charge, excluding the deferred tax effect1, increased by 283 million euros in the fourth quarter of 2016 compared with a particularly low charge of 46 million euros in the fourth quarter of 2015. Crédit Agricole S.A.'s underlying net income Group share was 904 million euros, a year-on-year increase of +52.6%. Stated net income Group share was 291 million euros in the fourth quarter after taking account of specific items[21], in particular the LCL goodwill impairment charge and the deferred tax revaluation. In full year 2016, stated net income Group share was 3,541 million euros. It includes the gain on Visa Europe shares sold in the second quarter (+327 million euros), the non-recurring impacts of the operation to simplify the Group's structure (+1,254 million euros) and LCL's funding cost adjustment (-187 million euros), as well as the non-deductible goodwill impairment (-491 million) and deferred tax revaluation impact (-160 million Group share) recognised in the fourth quarter. After adjustment for all the specific items listed in the appendix, underlying net income Group share increased by +22.8% to 3,137 million euros. The specific P&L items taken into account to reconcile stated and underlying amounts and changes for the fourth quarter and full year, as well as comparable data for 2015, are detailed in the appendix to this press release, on page 29 and 30. At end-December, Crédit Agricole S.A.'s solvency was further strengthened. The fully-loaded Common Equity Tier 1 ratio stood at 12.1%, an improvement of +140 basis points compared with end-December 2015 and +10 basis points compared with end-September 2016. The fourth quarter improvement stemmed mainly from the impact of retained earnings after prudential adjustments (+24 basis points) and the capital increase reserved for employees (+8 basis points), offset by the change in unrealised gains reserve (-16 basis points). Risk-weighted assets remained stable over the quarter at 301 billion euros. The phased-in total capital ratio stood at 20.1% at 31 December 2016, up +10 basis points compared with end-September 2016. Crédit Agricole S.A.'s phased-in leverage ratio under the Delegated Act adopted by the European Commission was 5.0%[22] at end-December 2016. Crédit Agricole Group's banking cash balance sheet totalled 1,085 billion euros at end-December 2016, compared with 1,072 billion euros at end-September 2016 and 1,058 billion euros at end-December 2015. The surplus of long term funding sources over long-term applications of funds was 111 billion euros at 31 December 2016. It exceeded the Medium Term Plan target of over 100 billion euros.  At 30 September 2016, it stood at 104 billion euros and 108 billion euros at 31 December 2015. At 31 December 2016, liquidity reserves including valuation gains and haircuts related to the securities portfolio amounted to 247 billion euros, representing 305% of gross short-term debt, versus 304% at 30 September 2016 and 257% at 31 December 2015. The LCR ratio of Crédit Agricole Group and of Crédit Agricole S.A. continued to exceed 110% at end-December 2016. In 2016, Crédit Agricole Group issuers raised 33.1 billion euros of senior and subordinated debt in the market. Moreover, 7.4 billion euros were placed by the Group in its retail networks.  Crédit Agricole S.A. itself raised the equivalent of 12.2 billion euros of senior preferred debt and 2.9 billion euros of subordinated and senior non-preferred debt, of which a US dollar denominated Additional Tier 1 issue of 1.15 billion euros equivalent, completed at the beginning of 2016, and a 1.5 billion euro issue of senior non-preferred debt, completed in December 2016.  At 31 December 2016, Crédit Agricole S.A. had completed 108% of its medium-to long term market funding programme (senior and subordinated debt) of 14 billion euros. At 31 December 2016, assets under management increased by +7.6% or 107 billion euros year-on-year. Net inflows totalled +71 billion euros, including +62 billion euros for Amundi, +8 billion euros for life insurance and +1 billion euros for wealth management, i.e. 5% of opening assets under management, confirming the business line's strong momentum. Apart from this solid commercial performance, the business line also recorded a positive market and currency effect of +22 billion euros and a positive scope effect of +14 billion euros (Amundi's acquisition of KBI GI for 9 billion euros and Crédit Agricole Immobilier Investors for 5 billion euros). Assets under management thus totalled 1,503 billion euros at 31 December 2016. Fourth quarter net income Group share for the Asset gathering business includes a charge of 80 million euros corresponding to the impact of the change of tax rate on deferred tax assets and liabilities (DTA/DTL) as of 2020, recognised in the Insurance business. Excluding this specific item[23], underlying net income Group share came to 528 million euros for the quarter, a year-on-year increase of 33.1%. See table in appendix for reconciliation of stated and underlying results. In full year 2016, the business line's underlying net income Group share increased by 18.3% year-on-year to 1,770 million euros, after restatement for the revaluation of deferred taxes in the fourth quarter of 2016, the impacts of the Switch guarantee trigger in the second quarter of 2015 and the Switch clawback in the third quarter of 2015. All of these specific items relate to the Insurance business. In the fourth quarter of 2016, Crédit Agricole Assurances' result includes a specific tax charge for -80 million euros relative to the revaluation of deferred tax assets and liabilities due to the change in the applicable tax rate from 2020 onwards. In the fourth quarter of 2016, the Insurance business delivered premium income of 7.0 billion euros compared with 7.3 billion euros in the fourth quarter of 2015[24]. Fourth quarter premium income for the Savings/retirement segment amounted to 5.5 billion euros, down -6.5% compared with the fourth quarter of 2015. This trend reflects Crédit Agricole Assurances' policy of shifting its product mix towards unit-linked (UL) business, as illustrated by the growth in UL contracts' share of gross inflows in the fourth quarter of 2016 (27.1%, an increase of +7.8 points over the year), which offset the decline in euro business inflows. Premium income remained stable year-on-year (down -0.3%) and was up slightly quarter-on-quarter. Assets under management continued to grow, reaching 269 billion euros at end-December 2016, a year-on-year increase of +3.5% driven mainly by +6.7% growth in UL assets. At end-December 2016, UL contracts represented 19.5% of total assets under management (up +0.5 point versus end-December 2015). Net inflows in Savings/retirement were +5.8 billion euros in 2016, including +3.1 billion euros in France. In the Death & disability/Health/Creditor segment, premium income rose by +11.5% year-on-year in the fourth quarter of 2016, to 846 million euros. Over the full year 2016, premium income increased by +8.5%, driven by sustained growth in all three business segments, and more particularly this quarter by a strong performance in creditor insurance for home loans (up +21.5% year-on-year in the fourth quarter) and in death & disability (up +9.4%). As in previous quarters, premium income from Property & casualty insurance continued to enjoy above-market growth in France, supported by good momentum in the retail market and the farming and small business segment. Premium income thus rose by +6.0%[25] year-on-year in the fourth quarter to 703 million euros. The combined ratio[26] remained well controlled at 95.9%. Thanks to this good commercial momentum, the Insurance business delivered a strong increase of its contribution to Crédit Agricole S.A.'s results. Its underlying net income Group share came to 391 million euros, an increase of +42.3% compared with the fourth quarter of 2015. For the full year 2016, underlying net income Group share was 1,257 million euros, up +26.0% compared with 2015 due to an exceptionally high level of financial income from the investment portfolio. Crédit Agricole Assurances' return on normalised equity (RoNE) was 18.8% for the year 2016. Crédit Agricole Assurances' solvency remains solid, with a regulatory ratio of 161% at 31 December 2016. Moreover, Crédit Agricole Assurances continues to strengthen its reserves: the policyholder participation reserve[27] now amounts to 7.0 billion euros, representing 3.5% of outstanding savings in euro contracts at end 2016. In Asset management, Amundi's[28] assets under management have reached 1,083 billion euros, an increase of +9.9% over one year, thanks to a strong level of inflows, positive market effects (+21.8 billion euros in 2016) and positive scope effects (+13.6 billion euros of additional assets under management through the acquisition of KBI Global Investors finalised on 29 August and the integration of Crédit Agricole Immobilier Investors). Over the full year, net inflows were +62.2 billion euros, driven by sustained business momentum in medium/long-term assets[29], which attracted net inflows of +45.5 billion euros across all the segment's asset classes. The Institutional segment contributed +27.5 billion euros, including +9.4 billion euros in medium and long-term assets, supported by substantial inflows in treasury products. The Retail segment contributed +34.7 billion euros, including +34.2 billion in medium and long-term assets, mainly through the joint ventures in Asia (+24.8 billion euros). The French networks made a slightly positive contribution, with net inflows of +2.0 billion euros in medium and long-term assets. In the fourth quarter, net inflows totalled +23.1 billion euros. Net inflows in medium and long-term assets remained high at +19.7 billion euros, representing 85% of the total. In the fourth quarter of 2016, Amundi's net income at 100% (including minorities) increased by +16.2% year-on-year to 150 million euros. In an environment of strong volatility, these excellent results were driven by resilient revenues (up +2.7%) thanks to strong management and performance fees, coupled with good control over costs (up +4.7%), which were nonetheless affected by the cost of preparing the Pioneer Investments acquisition. Net income Group share increased by +14.8% to 110 million euros.  In full year 2016, net income at 100% increased by +7.5% to 558 million euros. Revenues were up +1.2% in line with growth in operating expenses. The cost/income ratio remained stable compared with 2015 at 53.3%, reflecting an excellent level of operating efficiency. Net income Group share increased by only +2.1% to 411 million euros, due to the decrease in Crédit Agricole S.A.'s holding in Amundi from 78.6% in 2015 to 74.2% at end-2016. The Wealth management business maintained its assets under management in the third quarter, despite challenging market conditions. Assets under management were 152.4 billion euros at end-December 2016, an increase of +0.9% over one year. Net income Group share for the fourth quarter of 2016 was boosted by a rebound in activity, particularly in the United States, and by the initial effects of refocusing the business on countries that have signed the Automatic Exchange of Information (AEol) agreement. It amounted to 27 million euros, up +3.1% compared with the fourth quarter of 2015. In full year 2016, Wealth management's contribution to net income Group share increased by +6.8% to 103 million euros. The only specific item for the fourth quarter, restated in underlying results, was a charge of -25 million euros corresponding to the impact of the change of tax rate on deferred tax assets and liabilities (DTA/DTL) as of 2020. See table in appendix for reconciliation of stated and underlying results. In the fourth quarter of 2016, LCL's underlying net income Group share amounted to 160 million euros, a year-on-year increase of +35.3%. In line with the first nine months of the year, business momentum remained strong in the fourth quarter. The loan book was up sharply by +5.6% over the year to 102.7 billion euros at end-December 2016. Home loans grew by +4.8% over the year, consumer loans by +3.0% and business loans by +8.1%. Total customer assets grew by +2.3% to 179.1 billion euros over the year. On-balance sheet deposits rose by +5.3% to 99.8 billion euros at end-December 2016, driven by a 15.3% increase in demand deposits. LCL continued to deliver an excellent performance in insurance products over the year as a whole. New property & casualty insurance business increased by +13% over the year, while the number of contracts grew by +8%. In line with third-quarter trends, the sharp fall in interest rates after the Brexit vote led to a specific wave of renegotiations in the fourth quarter of 2016 (5.2 billion euros of renegotiated loans and 1.5 billion euros of early repayments). Revenues in the fourth quarter of 2016 proved resilient in the low interest rate environment, contracting by -1.1% year-on-year to 863 million euros. Restated for home purchase savings plans (charge of -17 million euros in the fourth quarter of 2016 versus -3 million euros in the fourth quarter of 2015), revenues increased by +0.4%. Compared with the third quarter of 2016, revenues, excluding home purchase savings plans, increased by +1.1%. Revenues, this quarter, include non-recurring fees of 14 million euros on early repayments and 25 million euros on renegotiations (versus 20 million euros and 8 million euros respectively in the fourth quarter of 2015). Operating expenses for the fourth quarter of 2016 amounted to 604 million euros, a significant year-on-year decrease of -3.5%. Cost of risk was 52 million euros in the fourth quarter and remains well contained (17 basis points of outstandings[30]). In full year 2016, LCL's underlying net income Group share was 509 million, down -9.9% compared with 2015. It has been restated for two specific items other than the deferred tax charge in the fourth quarter: a 41 million euros provision for branch network restructuring recognised in operating expenses in the second quarter of 2016 and a funding cost adjustment of -300 million euros recognised in revenues in the third quarter of 2016. See table in appendix for reconciliation of stated and underlying results. Underlying revenues for the full year amounted to 3,418 million euros, down -5.9% compared with 2015 due to the impacts of the low interest rate environment, which continued throughout the second half of 2016 post Brexit and led to a new wave of renegotiations and early repayments. Across 2016 as a whole, therefore, renegotiated loans totaled 11.9 billion euros (versus 14.2 billion euros in 2015) and early repayments 4.8 billion euros (versus 6.1 billion euros in 2015). Underlying operating expenses were well controlled and amounted 2,498 million euros in 2016, a decrease of -2.5% compared with 2015. Cost of risk remained low at 182 million euros for the year (versus 134 million euros for 2015), representing 17 basis points of outstandings1 (over four rolling quarters). This reflects a continued low level of risk in line with the past few quarters (as a reminder, the first half of 2015 included a recovery against a loan in litigation). Underlying net income Group share for the business line was 49 million euros in the fourth quarter compared with 37 million euros in the fourth quarter of 2015, a year-on-year increase of +32.3%[31]. In full year 2016, it came to 258 million euros versus 220 million euros in 2015, an increase of +17.3%1. In Italy, business momentum remained strong in the fourth quarter. Customer assets stood at 99.4 billion euros[32] at end-2016, a sharp year-on-year increase of +4.3%. Growth in off-balance sheet assets was particularly strong at +7.8% over the year to 64.9 billion euros. On-balance sheet deposits were down slightly by -1.6%, amounting to 34.5 billion euros2 at end-2016. Loans outstanding were up +2.9% at end-December 2016 to 34.7 billion euros, while the Italian market as a whole declined. Loans outstanding increased by +6.4% over the year and continued to be driven by home loans. In addition, loans to large corporates increased by +3.7% year-on-year while loans to SMEs and small businesses declined by -0.4% over the same period. In the fourth quarter, IRB Italy's revenues were down -1.7% to 409 million euros. Despite a +12% increase in fee and commission income (193 million euros in the fourth quarter of 2016 versus 173 million euros in the fourth quarter of 2015), driven by loan fees and commissions on customer assets, the low interest environment had a sharp adverse impact on revenues. Recurring operating expenses[33] remained well under control at 237 million euros (-3.3% year-on-year in the fourth quarter) despite investments made in line with the MTP. Including the cost of the Cariparma Group's adjustment plan recognised in the fourth quarter (-51 million euros), the contribution to the Italian rescue plan (-24 million euros) and the contribution to the deposit guarantee fund (-11 million euros), stated operating expenses amounted to 323 million euros. Cost of risk continued to fall significantly, amounting to -65 million euros in the fourth quarter of 2016, down almost -32.7% quarter-over-quarter. This progress was due to an improvement in the quality of IRB Italy's portfolio, with a further ­-37% decrease in new defaults in 2016 compared to 2015. IRB Italy's underlying net income Group share therefore came to 37 million euros in the fourth quarter of 2016, a year-on-year increase of +68.8%. The contribution to underlying net income Group share of all Crédit Agricole S.A.'s business lines in Italy[34] totalled 120 million euros in the fourth quarter, a year-on-year increase of +21%. In full year 2016, IRB Italy's revenues were 1,626 million euros, down -3.7% compared with 2015. The interest margin was down in an environment of low interest rates, but was partially offset by strong lending volumes. Stated operating expenses were 1,026 million euros and were affected in 2016 by the cost of the Single Resolution Fund (SRF) (-10 million euros), the contribution to the deposit guarantee fund (-11 million euros), the Italian rescue plan (-24 million euros) and the cost of the Cariparma Group's adjustment plan (-51 million euros) recognised in the fourth quarter of 2016. Restated for these items, recurring operating expenses amounted to 940 million euros (including SRF), stable compared with fourth quarter of 2015 (-0.1%). The cost/income ratio[35] therefore stood at 57.8% for 2016 as a whole. Cost of risk totalled -303 million euros in 2016, down -22.2% on 2015, thus falling to 93 basis points of outstandings[36] at end-December 2016 from 117 basis points in 2015. After the disposal of a 10 million euro sofferenze portfolio in the fourth quarter of 2016 (152 million euros of disposals in 2016 as a whole), the impaired loans ratio was 13.1% at end-2016 (versus 13.8% at end-2015) and the coverage ratio 46.5% including collective reserves, versus 45.5% in 2015. In full year 2016, IRB Italy's underlying net income Group share was 166 million[37], up +8.5% compared with 2015. The Return on net equity stand at 11,7% for 2016. The contribution to underlying net income Group share of all Crédit Agricole S.A.'s business lines in Italy1 totalled 482 million euros in 2016, a year-on-year increase of +6%. International retail banking excluding Italy (Other IRB) also delivered strong business momentum and a sustained financial performance this year. When expressed in euros, though, the business line's performance was affected by negative currency effects, mainly due to a -47% and -8% depreciation respectively of the Egyptian and Ukrainian currencies year-on-year in the fourth quarter. On-balance sheet deposits increased by +9.6%[38] over one year to 10.8 billion euros at end-December 2016, driven mainly by strong growth in Egypt (up +47%)5, Ukraine (up +37%)5 and, to a lesser extent, Poland (up +7%)5, while Morocco remained stable. Total customer assets increased by +11.5%5 over one year. Loans outstanding stood at 9.9 billion euros at end-December 2016, a year-on-year increase of +7.7%5. The surplus of deposits over loans was 1.6 billion euros at end-December 2016. In the fourth quarter of 2016, revenues increased by +2.2%5 year-on-year to 203 million euros, while operating expenses were down -5.1%5. Thanks to this highly positive jaws effect, gross operating income in the fourth quarter increased by +15.8%5 year-on-year to 74 million euros. Cost of risk decreased by -6.6%5 year-on-year in the fourth quarter to -41 million euros. Other IRB's net income Group share therefore came to 12 million euros in the fourth quarter of 2016 versus 15 million in the fourth quarter of 2015[39], a year-on-year increase of +37.5%[40]. More particularly: In full year 2016, revenues were 879 million euros, up +4.2%2 compared with 2015, driven mainly by Egypt (up +26%) and Ukraine (up +3.8%). Operating expenses were 530 million euros in 2016 versus 557 million euros in 2015, an increase of +2%2 due mainly to an increase in costs in Egypt (up +13%)2  and Ukraine (up +17%)2. Cost of risk was down sharply in 2016 to 151 million euros, a year-on-year decrease of -17%2, mainly due to Morocco (down -33%)2 and Ukraine (down -39%)2. Other IRB's net income Group share was 92 million euros in 2016, up sharply by 66%2 compared with 2015. The cost/income ratio is stable for year 2016 at 60.3% and a return on normalised equity (RoNE) at 14.1%. Specialised financial services business line includes consumer credit (CA Consumer Finance - CACF) and leasing and factoring (CA Leasing & Factoring - CAL&F). In the fourth quarter of 2016, the business line's net income Group share included the impact of deferred taxes revaluation for -3 million euros. Excluding this specific item, underlying net income Group share came to 174 million euros for the quarter. See table in appendix for reconciliation of stated and underlying results. Consumer finance (CACF) business was strong in the fourth quarter of 2016 in all partner networks. New lending was up +9.4% year-on-year to 9.9 billion euros, driven mainly by the car finance partnerships (up +9.8%) and the Group's retail banks (up 12.8%). The managed loan book increased by 8.4% year-on-year at end-December 2016, despite the disposal by Agos of a 380 million euros doubtful loans portfolio in the fourth quarter. It therefore stood at 77.2 billion euros at end-December 2016 compared with 71.2 billion euros at end-December 2015. The geographical breakdown was 38% in France, 31% in Italy and 31% in other countries. The consolidated loan book increased to 32.4 billion euros at 31 December 2016. In Leasing & Factoring (CAL&F), the leasing book grew by +3.7% year-on-year to 15.5 billion euros at end-December 2016. Factored receivables were stable compared with the fourth quarter of 2015, at 18 billion euros. In the fourth quarter of 2016, Specialised financial services revenues amounted to 683 million euros, up +4.0% year-on-year. CACF and CAL&F delivered revenue of 541 million euros and 142 million euros respectively, representing a year-on-year increase of +5.1% for CACF and +0.1% for CAL&F. Restated for the scope effect (deconsolidation of Credium and Credicom, which contributed 18 million euros of revenue in the fourth quarter of 2015), revenues for Specialised financial services increased by +1.3% year-on-year. Operating expenses were up +10.1% over one year to 365 million euros, reflecting implementation of the investment programme scheduled in the medium-term plan announced in March 2016. Cost of risk was up +9.4% year-on-year in the fourth quarter of 2016, partly due to an exceptionally low base for comparison in the fourth quarter of 2015 and partly to tighter provisioning rules introduced following the recovery in activity. Lastly, the joint-ventures delivered strong growth of +76.5% in their fourth-quarter equity-accounted contribution, driven mainly by FCA Bank. Restated for the Forso goodwill impairment in the fourth quarter of 2015 (-9 million euros), year-on-year growth was +37.3%. Underlying[41] net income Group share increased by +17.2% year-on-year in the fourth quarter to 174 million euros. CACF contributed 136 million euros (up +26.3% year-on-year) and CAL&F 38 million euros (down -7.2%). In full year 2016, Specialised financial services delivered revenues of 2,646 million euros, representing slight growth of +0.7% compared with 2015. Restated for the scope effect in the fourth quarter of 2015 (deconsolidation of Credium and Credicom), revenues were stable compared with 2015. Operating expenses were up +3.6% compared with 2015, to 1,384 million euros. The increase was due to implementation of the investment programme scheduled in the medium-term plan announced in March 2016. Cost of risk was down due to an improvement in quality of the customer portfolio. It amounted to 558 million euros for the year, a decrease of -15.2% compared with 2015. Cost of risk relative to outstandings stood at 140 basis points[42] in 2016, versus 162 basis points in 2015. Partnerships contributed to CACF's profitability, with a +26.8% increase in their equity-accounted contribution, mainly due to the car finance partnerships. Underlying net income Group share increased by +26.6% to 613 million euros versus 484 million euros in 2015. The specific P&L adjustments made to reconcile stated and underlying amounts and changes for the fourth quarter and full year 2016 and comparable data for 2015 are detailed in the appendix. In the fourth quarter of 2016, net income Group share for the Large customers business line includes the impact of loans hedges (-1 million euros), DVA running (-2 million euros) and the revaluation of deferred taxes (­1 million euros). Restated for these specific items, underlying net income Group share came to 274 million euros for the quarter compared with stated net income Group share of 271 million euros. See table in appendix for reconciliation of stated and underlying results. In the fourth quarter of 2016, underlying net income Group share for the Large customers business line amounted to 274 million euros, 2.4 times higher than the fourth quarter of 2015. Underlying net income Group share for the business line comprised a contribution of 182 million euros from Financing activities (up +39.5% year-on-year), 68 million euros from Capital markets and investment banking (versus a loss of 41 million euros in the fourth quarter of 2015) and 24 million euros from Asset servicing (down -6.9% year-on-year). Despite the year-end seasonal effect, commercial activity was satisfactory in all Corporate and investment banking activities. In the fourth quarter of 2016, revenues were 1,252 million euros, a year-on-year increase of +12.2% and +2.7% excluding xVA, thanks to strong commercial momentum in most business lines. Revenues from Capital markets amounted to 458 million euros in the fourth quarter, down -5.1% excluding xVA compared with the fourth quarter of 2015. Fixed-income, forex and credit business remained buoyant, with strong client activity. VaR remained contained at 13 million euros on average over the quarter. Crédit Agricole Corporate & Investment Bank (CACIB) moved up to world No. 1 in agency bond issues in euros[43], maintained its European No. 1 position in ABCP securitisation[44] and is world No. 2 in green bond issues[45]. Investment banking, which ranks French No. 2 in equity issues4 and No. 4 in M&A advisory4 (French clients), delivered strong revenue growth driven by excellent momentum in M&A business this quarter. Its revenues for the quarter were 72 million euros, a year-on-year increase of +33.3%. Structured finance revenues fell slightly, with a good performance in the air and rail transport and infrastructure segments, while some activities were affected by an unfavourable environment in the shipping and oil & gas sectors. Revenues were 292 million euros in the fourth quarter of 2016, a year-on-year decrease of -4.8%. CACIB remains world No. 1 in aircraft financing[46]. Commercial banking revenues for the fourth quarter were up year-on-year to 249 million euros, as the fourth quarter of 2016 had been affected by an impairment loss against a portfolio of real estate loans. All business activities proved resilient in an environment of low interest rates and slowdown in world trade. CACIB ranks second in syndicated loans in France1. Asset servicing revenues were down slightly at 181 million euros in the fourth quarter of 2016. Operating expenses for the Large Customers business line totalled 786 million euros in the fourth quarter of 2016 versus 829 million euros in the same period of 2015, reflecting excellent control over costs given the investment required to develop the various business activities and the cost related to regulatory projects. Cost of risk was also stable compared with the first three quarters of 2016 (excluding the 50 million euros legal risk provision taken in both the second and third quarters of 2016). Cost of risk relative to outstandings for Financing activities remained low at 27 basis points in the fourth quarter of 2016[47]. Share of income from equity-accounted entities amounted to 29 million euros, a decrease compared with the fourth quarter of 2015, reflecting a decline in performance by Banque Saudi Fransi. In full year 2016, net income Group share for the business line was 1,295 million euros, up +15.2% compared with 2015. It included a contribution to the Single Resolution Fund (SRF) of 149 million euros and a legal risk provision of 100 million euros. The cost/income ratio stood at 60.7%[48] and the RoNE at 9.7% in line with the medium term plan target. The specific P&L adjustments made to reconcile stated and underlying amounts and changes for the fourth quarter and full year 2016 and comparable data for 2015 are detailed in the appendix. In the fourth quarter of 2016, Corporate Centre results include a gain of +103 million euros relating to the change in issuer spreads, a goodwill impairment charge of -491 million euros relating to LCL and a tax charge of -52 million euros relating to the change of tax rate for deferred tax assets and liabilities (DTA/DTL) as of 2020. (1) cost of capital, interest rates management, liquidity and debt as Central body and treasurer (2) excluding specific items detailed pages 29 and 30 of this document The fourth quarter of 2016 was the first quarter of the year not affected by the non-recurring impacts of the operation to simplify the Group's structure (Eureka). However, this quarter's revenues benefit from the recurring impacts of the Eureka operation, i.e. interest income of +59 million euros on the loan granted to the Regional Banks, elimination of the cost of Switch 1 for +115 million euros and the impact of the balance sheet optimisation operation for +53 million euros. Underlying revenues thus amounted to -223 million euros in the fourth quarter of 2016, a year-on-year improvement of +44.5%. The cost of carrying the Group's equity investments and net costs of subordination was namely down sharply, by -66.7%. Underlying net income Group share was down -29.4% year-on-year in the fourth quarter of 2016, to -281 million euros. In full year 2016, underlying net income Group share was -1,310 million euros, quasi stable compared with 2015. The specific adjustments made to reconcile stated and underlying amounts and changes for the fourth quarter and full year 2016 and comparable data for 2015 are detailed in the appendix on pages 29 and 30. Crédit Agricole Group's total customer loans amounted almost to 774 billion euros at end-December 2016. Customer accounts on the balance sheet were more than 693 billion euros. In the fourth quarter of 2016, the Group's net income Group share came to 671 million euros versus 1,564 million euros in the fourth quarter of 2015. Excluding specific items[49] totalling -977 million euros this quarter (mainly LCL goodwill impairment for -540 million and revaluation of deferred taxes for -453 million euros) versus +59 million euros in the fourth quarter of 2015, underlying net income Group share came to 1,648 million euros, an increase of +9.5% compared with the same quarter of last year. Underlying revenues were up slightly, as were operating expenses, mainly due to the investments scheduled in the MTP. Cost of credit risk decreased to -457 million euros, representing 28 basis points[50] in the fourth quarter of 2016 (versus 30 basis points in the same period of the previous year). In full year 2016, underlying revenues were 31,314 million euros, stable compared with 2015. Underlying operating expenses were up slightly by +1.5% compared with 2015, while underlying cost of credit risk was down -8.6% to 2,312 million euros. As a reminder, additional legal risk provisions of -500 million euros were recognised in 2015 and this item has been restated in underlying cost of risk, the amount of -€100m of legal risk provisions registered in 2016 has not been restated. In full year 2016, the Group's underlying net income Group share1 was 6,353 million euros, up +3.1% compared with 2015. The specific P&L adjustments made to reconcile stated and underlying amounts and changes for the fourth quarter and full year 2016 and comparable data for 2015 are detailed in the appendix. Continued brisk business during the quarter supported growth in Crédit Agricole S.A.'s business lines. Customer assets rose by +4.0% year-on-year to 646.6 billion euros. Growth was driven by on-balance sheet deposits (up +6.1% over one year to more than 391 billion euros at end-December 2016), while off-balance sheet customer assets rose by +0.9% to more than 255 billion euros. On-balance sheet deposits continued to be driven by demand deposits (up +15.8% year-on-year) and home purchase savings plans (up +7.0%). The Regional Banks also achieved strong momentum in personal and property insurance. Loans outstanding rose by +4.4% year-on-year, to 429.5 billion euros at end-December 2016. Growth in the loan book continued to be driven by home loans and consumer finance (up +6.5% and +9.3% respectively, year-on-year). Loans to SMEs/small businesses and farmers both increased by +2.8% and +1.6% respectively.  The fourth quarter of 2016 was affected by the revaluation of deferred taxes for -301 million euros. Restated for this item, the Regional Banks' net income Group share amounts to 707 million euros in the fourth quarter of 2016, representing a year-on-year decrease of 25.1%. Revenues were down -11.6%. It should be noted that since the previous quarter, they include the initial effects of the operation to simplify the Group's structure (Eureka), with a net impact of -174 million euros in the fourth quarter of 2016: (i) elimination of Switch 1 income following its unwinding on 1 July 2016, (ii) cost of the 11 billion euros loan granted by Crédit Agricole S.A. on 3 August 2016. Excluding these impacts and excluding provisions for home purchase savings plans, the Regional Banks' revenues amounted to 3,639 million euros in the fourth quarter of 2016, up +3.1% compared with the fourth quarter of 2015. The interest margin was stable compared with the fourth quarter of 2015, excluding the impacts of home purchase savings provisions and the Eureka operation (-97 million euros in the fourth quarter of 2016). Expenses are up +6.6% reflecting mainly IT investments in line with the MTP. In full year 2016, the Regional Banks' underlying net income Group share amounted to 3,090 million euros, down -13.9% over the year. The only specific item for the year was the revaluation of deferred taxes for -301 million euros recognised in the fourth quarter. The specific P&L adjustments made to reconcile stated and underlying amounts and changes for the fourth quarter and full year 2016 and comparable data for 2015 are detailed in the appendix. ***** Crédit Agricole S.A.'s financial information for the fourth quarter and twelve months of 2016 consists of this press release and the attached presentation. All regulated information, including the registration document, is available on the website www.credit-agricole.com/en/finance/finance/financial-publications and is published by Crédit Agricole S.A. pursuant to the provisions of article L. 451-1-2 of the Code Monétaire et Financier and articles 222-1 et seq. of the AMF General Regulation. Reconciliation between the stated and the underlying results of Asset gathering Reconciliation between the stated and the underlying results of LCL * Network optimisation costs in Q2-16, adjustment of funding costs in revenues in Q3-16 and impact of the change of tax rate on deferred tax assets and liabilities (DTA/DTL) in Q4-16. Reconciliation between the stated and the underlying results of International retail banking * Adjustment for the Cariparma Group's adjustment plan Q4-16 for €-51m and for the adjustment of the contribution of international subsidiaries of regional banks reclassified in IFRS 5 for €+2m in Q4-15 and €+6m in 2015 Reconciliation between the stated and the underlying results of Specialised financial services Reconciliation between the stated and the underlying results of Large Customers Reconciliation between the stated and the underlying results of Regional Banks [1] See p. 28 (Crédit Agricole Group) and 29-30 (Crédit Agricole S.A.) of this press release for further details on specific items [2] Pro forma Pillar 2 requirement (P2R) as notified by the ECB [3] To be proposed to the shareholders' meeting in May 2017, detachment date: 29 May 2017, payment date: 31 May 2017 [4] See appendix on pages 27 and 28 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [5] For detail of specific items of the fourth quarter and full year 2016, and comparable periods of 2015, see pages 27 and 28 of this press release [6] On consolidated outstandings, calculated on an average annualised basis over four rolling quarters [7] As defined in the Delegated Act. Assumption of non-exemption of exposures related to the centralisation of CDC deposits, according to our understanding of information obtained from the ECB. [8] See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [9] To be proposed to the shareholders' meeting in May 2017, detachment date: 29 May 2017, payment date: 31 May 2017 [10] Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [11]  Bookrunner for bond issues in € - global (Source Thomson Financial at 31/12/16). [12]  See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [13]  Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [14]  See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [15]  As defined in the Delegated Act. Subject to ECB authorisation, assumption of exemption of intragroup transactions for Crédit Agricole S.A. (with an impact of +110 basis points) and non-exemption of exposures related to the centralisation of CDC deposits, according to our understanding of information obtained from the ECB. [16]  Crédit Agricole S.A., Amundi, CACEIS, Crédit Agricole Assurances, Crédit Agricole Corporate and Investment Bank, Crédit Agricole Consumer Finance, Crédit Agricole Immobilier, Crédit Agricole Leasing & Factoring, Crédit Agricole Private Banking (with Crédit Agricole Indosuez Private Banking, Crédit Agricole Luxembourg, Crédit Agricole Suisse and CFM Monaco), Cariparma, LCL, the Group's Payments Division and Uni-Éditions. [18] See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [21] See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [22]   As defined in the Delegated Act. Subject to ECB authorisation, assumption of exemption of intragroup transactions for Crédit Agricole S.A. (with an impact of +130 basis points) and non-exemption of exposures related to the centralisation of CDC deposits, according to our understanding of information obtained from the ECB. [23]  See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. 1 2015 pro forma: split of IFRS premium income by new business line following transfer of individual health and personal accident from "Death & disability/Health/Creditor" to "Property & Casualty insurance". [26] Ratio of (claims + operating expenses + commissions) to premium income, net of reinsurance. Pacifica scope. [28] Amundi is a listed company and published its detailed results for the fourth quarter and year 2016 on 10 February 2017 last. [30] Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [31]  Restated for Cariparma Group's adjustment plan (-25 million euros) in 2016 and contribution of Regional Bank's international subsidiaries (+6 million euros) in 2015 [32]  Pro forma for reclassification in Q3-16 of financial clients deposits from on-balance sheet deposits to market funding. [33]  Operating expenses excluding Cariparma Group's adjustment plan, contributions to the deposit guarantee fund and Italian rescue plan [34]  Aggregation of contributions from Crédit Agricole S.A.'s entities in Italy, mainly Cariparma Group, CACIB, CA Vita, Amundi, Agos, FCA Bank (assuming that only half of FCA Bank's contribution comes from Italy) [36]  Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [39] Restated for the contribution of Regional Bank's international subsidiaries (+2 million euros in Q4-15 and +6 million euros in 2015) [41] See appendix on pages 29 and 30 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [42] Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [47] Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters. [48] Calculated on the basis of underlying revenues and operating expenses. [49] See appendix on pages 27 and 28 of this press release for details of specific items for the fourth quarter and full year 2016 and comparable data for 2015. [50] Relative to consolidated outstandings, calculated on an average annualised basis over four rolling quarters


Eutelsat Communications (Paris:ETL) (NYSE Euronext Paris: ETL) today announced that SRG SSR, Switzerland’s public TV and radio broadcaster, has confirmed its long-term commitment to the HOT BIRD neighbourhood with the multi-year renewal of one transponder that complements a second transponder already booked on a long-term basis. SRG SSR occupies the two HOTBIRD transponders to broadcast seven channels (RTS Un, RTS Deux, SRF 1, SRF zwei, SRF info, RSI LA 1, RSI LA 2) exclusively in HD quality to Swiss homes beyond range of quality terrestrial reception and for Swiss citizens living abroad. The capacity is also used for Hbb TV services and 26 public service radio stations. The upgrade to an all-HD satellite offer at the HOTBIRD neighbourhood was completed in February 2016 with a focus on delivering high signal quality. Eutelsat’s cluster of three high-power HOTBIRD satellites at 13° East deliver an unrivalled line-up of over 1,000 channels. The trend towards HD is accelerating, with a 25% increase in channels over the last 12 months, taking the total to over 250 and transforming HOTBIRD into a hub of exclusive pay-TV and free-to-air HD content. Over 135 million homes in Europe, the Middle East and North Africa watch channels broadcast by the HOTBIRD constellation through Direct-to-Home reception, cable, IP and DTT networks. About Eutelsat Communications Established in 1977, Eutelsat Communications (Euronext Paris: ETL, ISIN code: FR0010221234) is one of the world's leading and most experienced operators of communications satellites. The company provides capacity on 39 satellites to clients that include broadcasters and broadcasting associations, pay-TV operators, video, data and Internet service providers, enterprises and government agencies. Eutelsat’s satellites provide ubiquitous coverage of Europe, the Middle East, Africa, Asia-Pacific and the Americas, enabling video, data, broadband and government communications to be established irrespective of a user’s location. Headquartered in Paris, with offices and teleports around the globe, Eutelsat represents a workforce of 1,000 men and women from 37 countries who are experts in their fields and work with clients to deliver the highest quality of service. For more about Eutelsat please visit www.eutelsat.com www.eutelsat.com – Follow us on Twitter @Eutelsat_SA and Facebook Eutelsat.SA

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