Current Report no. 19 (2014)

Fitch upgrades Bank Zachodni WBK S.A. to 'bbb+'; outlook stable

The Management Board of Bank Zachodni WBK S.A. hereby publishes the rating decision issued by Fitch Agency.

FITCH UPGRADES BANK ZACHODNI WBK S.A. TO 'BBB+'; OUTLOOK STABLE

Fitch Ratings-Warsaw/London-02 June 2014: Fitch Ratings has upgraded Poland-based Bank Zachodni WBK S.A.'s (BZ WBK), Long-term Issuer Default Rating (IDR) to 'BBB+' from 'BBB'. The Outlook is Stable.

The agency has also upgraded the bank's National Long-term rating to 'AA-(pol)' from 'A+(pol)'. The Viability Rating of BZ WBK was not affected by these rating actions. A full list of rating actions is available at the end of this commentary.

KEY RATING DRIVERS AND SENSITIVITIES: IDRS, SUPPORT AND NATIONAL RATING

The rating actions follow Fitch's recent upgrade of BZ WBK's 70% parent Banco Santander's (Santander, A-/Stable) Long-term IDR (for more details see 'Fitch Upgrades Santander and BBVA to 'A-'; Stable Outlook' at www.fithchratings.com).

Following the parent's upgrade, the IDRs, Support Rating and National Rating of BZ WBK are now based on Fitch's view of a high probability that BZ WBK would be supported, if required, by Banco Santander. Previously, the IDRs and National Rating of BZ WBK were driven by the bank's intrinsic strength as reflected by its Viability Rating (VR) of 'bbb'. Fitch believes that Poland is a strategically important market for Santander and BZ WBK a strategically important subsidiary for its parent.

The Stable Outlook on BZ WBK's Long-Term IDR reflects that on Santander. A further upgrade of Santander's Long-term IDR would most likely result in an upgrade of BZ WBK's Long-term IDR and Support Rating, provided that the parent's propensity to support BZ WBK remains strong.

A downgrade of Santander's IDRs or weakening of its propensity to support BZ WBK would result in a downgrade of the subsidiary's Long-and Short-term IDRs. However, any potential downgrade of the bank's Long-term IDR would be limited to one notch due to the floor being provided by BZ WBK's VR of 'bbb'.

The rating actions are:

Long-term foreign currency IDR: upgraded to 'BBB+' from 'BBB', Outlook Stable
Short-term foreign currency IDR: upgraded to 'F2' from 'F3'
Viability Rating: unaffected at 'bbb'
Support Rating: affirmed at '2'
National Long-term rating: upgraded to 'AA-(pol)' from 'A+(pol)', Outlook Stable
Senior unsecured debt National Long term rating: upgraded to 'AA-(pol)' from 'A+(pol)'

Contact:

Primary Analyst
Artur Szeski
Senior Director
+48 22 338 6292

Fitch Polska S.A.
Krolewska 16,
00-103 Warsaw

Secondary Analyst
Michal Bryks
Director
+48 22 338 6293

Committee Chairperson
Claudia Nelson
Senior Director
+44 20 3530 1191

Legal basis:
§ 5 clause 1 point 26 of the Finance Minister’s of 19 February 2009 on current and periodic reports published by the issuers of securities and the rules of equal treatment of the information required by the laws of non-member states