(BBNI) Fitch upgrades viability rating of BNI

JAKARTA - Fitch Ratings has upgraded the Viability Rating of Indonesia-based PT Bank Negara Indonesia (Persero) Tbk (BNI) to 'bb+' from 'bb' and affirmed its Long-Term Issuer Default Rating (IDR) at 'BBB-' and its National Long-Term Rating at 'AA+(idn)'. Fitch has also assigned National Short-Term Ratings of 'F1+(idn)' to the state-owned bank. The rating Outlooks are Stable.

'AAA(idn)' National Long-Term Ratings denote the highest ratings assigned by Fitch on its national rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country.

'AA(idn)' National Long-Term Ratings denote expectations of very low default risk relative to other issuers or obligations in the same country. The default risk inherently differs only slightly from that of the country's highest rated issuers or obligations.

'F1+(idn)' National Short-Term Ratings indicate the strongest capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Under the agency's National Rating scale, this rating is assigned to the lowest default risk relative to others in the same country. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating.

KEY RATING DRIVERS - Viability Ratings (VRs)
The upgrade of BNI's VR to 'bb+' from 'bb' reflects the consistent improvement in its profitability while maintaining adequate capitalisation and satisfactory asset quality. BNI's earnings have proved resilient through business cycles. The bank is focusing on increasing corporate loans, including to the infrastructure, food and energy sectors. BNI's proportion of loans overdue by more than 90 days is higher than Mandiri's and BRI's while the bank's Fitch core capital (FCC) ratio remained solid at 17.4% at end-1H14, supported by strong internal capital generation.

The full list of rating actions is as follows:

- Long-Term Foreign-Currency affirmed at 'BBB-'; Outlook Stable
- Long-Term Local-Currency IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term Foreign-Currency IDR affirmed at 'F3'
- Support Rating Floor affirmed at 'BBB-'
- Support Rating affirmed at '2'
- Viability Rating upgraded to 'bb+' from 'bb'
- National Long-Term Rating affirmed at 'AA+(idn)'; Outlook Stable
- National Short-Term Rating assigned at F1+(idn)'
- Senior unsecured bond affirmed at 'BBB-'