Fitch changes NORD/LB, BremerLB to negative

Fitch Ratings said it revised the outlooks on Norddeutsche Landesbank GZ (NORD/LB) and its fully owned subsidiary Bremer Landesbank Kreditanstalt Oldenburg GZ (BremerLB) to negative from stable and affirmed their long-term issuer default ratings at A-.

The agency also downgraded NORD/LB's viability rating to bb from bb+ and BremerLB's viability rating to b+ from bb and subsequently withdrawn BremerLB's viability rating.

The actions follow BremerLB's March 9 profit warning announcing a loss of about €1.4 billion in 2016, which is significantly higher than the high nine-digit range previously expected by management.

Fitch said the downgrade of BremerLB's viability rating reflects its view that the bank's prospects for ongoing unsupported viability have weakened. In 2016, considerable loan impairment charges relating to its sizeable shipping portfolio depleted its small capital base, making a capital injection from NORD/LB necessary.

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