Credit ratings agency Fitch Ratings said on Jan 23 it has affirmed ProCredit Bank Macedonia's (PCBM) long-term foreign currency and local currency Issuer Default Ratings (IDRs) at 'BB+' with a stable outlook and upgraded its Viability Rating to b+ from b. Fitch also affirmed PCBM's short-term foreign and local currency IDRs at B, as well as the support rating at 3. The agency commented that the long-term IDRs and support ratings of PCBM reflect the potential support from its parent, ProCredit Holding AG & Co. KGaA (PCH, BBB-/Stable). Fitch further notes that PCH's ratings in turn reflect the potential support that could be received from its core shareholders when necessary, especially from its international financial institution shareholders. The agency informs that PCBM's IDRs and Support Ratings will be affected in case of a multi-notch downgrade in Macedonia's sovereign rating (BB+/Stable) and Country Ceiling (BBB-), while an upgrade of the sovereign rating would not cause an upgrade of the lender's IDRs, in view of the ratings of its parent. The agency said that the upgrade of the bank's Viability Rating to b+ from b was driven by the lender's "improved performance in 9M13, consistent and sound asset quality track record that continues to outperform the sector average". Fitch noted that PCBM's loans overdue by 90 days have been in the range from 2% to 3% since end-2010, and have strong reserves coverage. Another positive is the lender's comfortable liquidity. In addition, the agency expects GDP growth in Macedonia to accelerate to 3.2% in 2014 from 2.7% in 2013, which should further support the bank's performance and asset quality. On the negative side, Fitch perceives the lender's capitalisation as only moderate. The agency also notes that while PCBM has a high level of foreign currency loans, foreign exchange risks are reduced by Macedonia's fixed exchange rate regime. Macedonia's central bank classified PCBM in the group of medium-sized banks as of Sep 30, 2013 . The lender's total assets stood at MKD 15.05bn ( EUR 244.8mn ) at end-2012, and the equity amounted to MKD 1.37bn.
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