Unibanka and Uhispank have decided to withdraw their ratings due to their increasingly high level of integration with parent bank Skandinaviska Enskilda Banken, which holds 98.4 percent of both Unibanka and Uhispank.
The withdrawn ratings for Unibanka were short-term F3, long-term BBB, individual C/D and local currency LC-1 while for Uhispank the withdrawn ratings were short-term F2, long-term BBB+, individual C/D and local currency LC-1.
SEB is increasingly involved in both bank's operations, sitting on supervisory and management boards and influencing all aspects of their operations from strategy to funding.
The agency said in the statement that Unibanka's profitability has been adequate but was under pressure in 2000 due to the high level of competition. Fitch expects better performance and more diversified income from 2002 as newer business areas, such as leasing, asset management and insurance brokering begin to contribute.
The agency noted that it is still too early to tell whether underlying asset quality has improved. Nonetheless, reserve coverage is sufficient and Unibanka's liquidity now benefits from growing retail deposits and SEB support. Positive economic forecasts for Latvia bode well for growth in Unibanka's operations, the agency concluded.
Fitch believes that SEB would support both banks for the foreseeable future should it be necessary, thus justifying the support rating of 3. Fitch support ratings deal with the question of whether a bank would receive support from its owners or from the state if it were to get into difficulty. A support rating of 3 affirms the bank's strategic investors are ready to provide such support.
Unibanka's profit in 2000 was 10.36 million lats ($16.55), according to audited results. The bank's operational revenues last year were 32.10 million lats, an increase of some 4 percent over 1999.
Last year Unibanka's profit per share was 0.27 lats. In 1999 the respective figure was 0.28 lats.
The bank's assets last year grew by 35.2 percent to 453.39 million lats. Unibanka is the second largest commercial bank in Latvia in terms of assets.
Uhispank posted a loss of 90.4 million kroons ($5.13 million) in 2000.