Fitch reviews Banco BPI

Fitch Ratings said it placed Banco BPI SA's BB long-term issuer default rating on Rating Watch Evolving (RWE) and short-term issuer default rating on Rating Watch Positive (RWP).

This follows CaixaBank, SA's (BBB/positive) April 18 announcement of a voluntary tender offer for all Banco BPI's outstanding shares.

The agency also placed Banco BPI's viability rating of bb on Rating Watch Negative (RWN) because of risks to the bank's credit profile in case the takeover fails related to its breach of large exposure limits.

Fitch said the evolving watch on Banco BPI's long-term issuer default rating reflects rating upside potential in case the voluntary tender offer results in CaixaBank taking control of Banco BPI, which Fitch currently deems to be the most likely scenario.

The agency believes Banco BPI's issuer default ratings would benefit from institutional support from its parent and hence its ratings would be notched from CaixaBank's, while taking into account the Portuguese sovereign rating (currently BB+/stable long-term issuer default rating).

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