By Aaron Gray-Block
AMSTERDAM, Feb 6 (Reuters) - Friesland Bank said its solvability and liquidity are strong despite the difficult market circumstances as the Dutch bank responded to a downgrade on Friday from ratings agency Fitch.
Fitch lowered the bank's long-term rating to A minus from A and the short-term rating to F2 from F1, both with a 'stable outlook' and said it expects Friesland Bank to report a small loss in 2008 due to the sharp downturn in equity markets, which weighed on the bank's listed investments.
'The weak domestic and international economy is expected to weigh on all of Friesland Bank's earning sources in coming years, thereby reducing the bank's financial flexibility,' Fitch said.
Friesland Bank, which calls itself the 7th-largest general bank in the Netherlands, did not deny it could report a loss on its banking investments, adding that it too has felt the turbulence on financial markets.
'The capital position of the bank remains strong,' the bank said in a statement, noting that it likely had a BIS capital ratio of more than 12.5 percent at the end of 2008.
Friesland Bank said its strong solvability is partly due to the fact that as an unlisted company, it has been able to almost always add its results to its reserves in the 95 years it has operated.
The bank added that its end-year liquidity position more than adequately meets the requirements of Dutch regulators and that ratings agency Moody's maintained its A2 rating in December with a 'stable outlook.'
The Dutch banking sector has been hard hit by the global financial crisis, with the Dutch government moving to nationalise the Dutch operations of Fortis, including ABN AMRO, for 16.8 billion euros ($21.5 billion). ING has also tapped heavily into a Dutch government capital injection and guarantees as it posted a 2008 loss of 1 billion euros.
In its ratings downgrade, Fitch pointed out that Friesland Bank's ratings continue to reflect its sound capitalisation and good regional franchise.
But it also said the ratings take into account the bank's modest size, its focus on the northern Netherlands and the reliance of its profitability on private equity and stakes in financial institutions.
Fitch said the 2008 earnings will be primarily affected by Friesland Bank's stake in Dutch online broker BinckBank , which the company acquired in 2006 and partially disposed of last December.
Friesland Bank will report its full-year figures on April 9.
(Editing by Bernard Orr)
($1=.7807 Euro) Keywords: FRIESLANDBANK/ (aaron.gray-block@thomsonreuters.com; +31 20 504 5001; Reuters Messaging: aaron.gray-block.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
AMSTERDAM, Feb 6 (Reuters) - Friesland Bank said its solvability and liquidity are strong despite the difficult market circumstances as the Dutch bank responded to a downgrade on Friday from ratings agency Fitch.
Fitch lowered the bank's long-term rating to A minus from A and the short-term rating to F2 from F1, both with a 'stable outlook' and said it expects Friesland Bank to report a small loss in 2008 due to the sharp downturn in equity markets, which weighed on the bank's listed investments.
'The weak domestic and international economy is expected to weigh on all of Friesland Bank's earning sources in coming years, thereby reducing the bank's financial flexibility,' Fitch said.
Friesland Bank, which calls itself the 7th-largest general bank in the Netherlands, did not deny it could report a loss on its banking investments, adding that it too has felt the turbulence on financial markets.
'The capital position of the bank remains strong,' the bank said in a statement, noting that it likely had a BIS capital ratio of more than 12.5 percent at the end of 2008.
Friesland Bank said its strong solvability is partly due to the fact that as an unlisted company, it has been able to almost always add its results to its reserves in the 95 years it has operated.
The bank added that its end-year liquidity position more than adequately meets the requirements of Dutch regulators and that ratings agency Moody's maintained its A2 rating in December with a 'stable outlook.'
The Dutch banking sector has been hard hit by the global financial crisis, with the Dutch government moving to nationalise the Dutch operations of Fortis, including ABN AMRO, for 16.8 billion euros ($21.5 billion). ING has also tapped heavily into a Dutch government capital injection and guarantees as it posted a 2008 loss of 1 billion euros.
In its ratings downgrade, Fitch pointed out that Friesland Bank's ratings continue to reflect its sound capitalisation and good regional franchise.
But it also said the ratings take into account the bank's modest size, its focus on the northern Netherlands and the reliance of its profitability on private equity and stakes in financial institutions.
Fitch said the 2008 earnings will be primarily affected by Friesland Bank's stake in Dutch online broker BinckBank , which the company acquired in 2006 and partially disposed of last December.
Friesland Bank will report its full-year figures on April 9.
(Editing by Bernard Orr)
($1=.7807 Euro) Keywords: FRIESLANDBANK/ (aaron.gray-block@thomsonreuters.com; +31 20 504 5001; Reuters Messaging: aaron.gray-block.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.