Current Report No. 4/2012

1 March, 2012

Fitch takes a rating action on Bank Zachodni WBK SA

The Management Board of Bank Zachodni WBK hereby informs that on 01 March 2012 Fitch Ratings has affirmed the support-driven ratings of Bank Zachodni WBK S.A. (BZ WBK), including its Long-term Issuer Default Rating (IDR) at 'A-' with a Negative Outlook and placed its 'bbb' Viability Rating (VR) on Rating Watch Negative (RWN).

The rating actions follow the statement made on February 28 by Banco Santander ('A'/Negative) and KBC ('A-'/Stable) announcing the agreement to merge their Polish banking subsidiaries. According to the agreement, BZ WBK will merge with KB by issuing new shares to KB's shareholders in exchange for their shares in KB. On completion of the merger, Santander will be majority shareholder of the combined entity and KBC will hold a minority stake. The transaction is subject to regulatory approval from the Polish FSA and antitrust approval from the European Commission.

The affirmation of BZ WBK's support-driven ratings reflects Fitch's view that the merged bank will continue to be of high strategic importance to Santander, resulting in a high propensity of the parent to provide support.

The RWN on BZ WBK's VR highlights the fact that BZ WBK will be integrating with a weaker bank, as indicated by KB's VR of 'bb+', and that the standalone credit profile of the merged entity is likely to be moderately weaker than that of BZ WBK at present. In particular, Fitch expects the merged bank's capital ratios, asset quality and performance to be slightly weaker than those of BZ WBK. At the same time, Fitch notes that the pre-merger BZ WBK is a relatively strong credit at the 'bbb' level, and any downgrade of the VR is likely to be limited to one notch.

Fitch will resolve the RWN on BZ WBK's VR no later than upon completion of the legal merger. However, the agency also expects to review the VR following publication of BZ WBK's audited 2011 financial statements and receipt of further information on the pro forma financial profile of the merged entity.

The rating actions are:

Bank Zachodni WBK S.A.
Long-term foreign currency IDR: affirmed at 'A-', Outlook Negative
Short-term foreign currency IDR: affirmed at 'F2'
Viability Rating: 'bbb', placed on RWN
Support Rating: affirmed at '1'


Primary Analyst (Bank Zachodni WBK S.A.)

Artur Szeski
+48 22 338 6292
Fitch Polska S.A.
Krolewska 16,
00-103 Warsaw

Secondary Analyst (Bank Zachodni WBK S.A.)

Michal Bryks
Associate Director
+48 22 338 6293

James Watson
Managing Director
+7 495 956 6657

Additional information is available at

Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 16 August 2011, are available at

Legal base:
§ 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

Santander Bank Polska S.A. with its registered office in Warsaw, al. Jana Pawła II 17, 00-854 Warszawa, registered by the District Court for the capital city of Warsaw, 12th Commercial Division, set up under regulation of the Council of Ministers of 11 April 1988 on setting up Bank Zachodni in Wrocław (Journal of Laws of 1 July 1988, No. 21, item 142), registered under KRS number 0000008723, REGON 930041341, NIP 896 000 56 73, share capital of PLN 1,020,883,050 paid-up in full. Helpline: 1 9999 – fee as per the operator’s tariff.

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