The following is a press release from Fitch Ratings:
Fitch Ratings-London/ Frankfurt- 31 July 2007: Fitch Ratings has today affirmedDekaBank Deutsche Girozentrale's ("DekaBank") Long-term Issuer Default Rating ("IDR") at 'A-' (A minus) and Short-term IDR at 'F1'. Fitch also affirmedDekaBank's Individual Rating at 'B/C' and Support Rating at '1'. The Outlook forthe Long-term IDR is Stable. At the same time, Fitch affirmed the Long-term'AAA' rating of DekaBank's guaranteed obligations. DekaBank's Support RatingFloor is affirmed at 'A-' (A minus). DekaBank's public sector Pfandbriefe arerated 'AAA'. DekaBank's Long- and Short-term IDRs are driven by its ownfinancial strength rather than the implicit support from a regional statefactored into most Landesbanks' IDRs. The Support Rating reflects Fitch'sopinion that support from its owners would very likely be forthcoming in theevent of need. Nevertheless, the Support Rating Floor is based on potentialsovereign support given DekaBank's role as the central asset manager to theGerman savings banks sector, with more than five million, largely retail,customer accounts. Fitch also takes into account the diverging interests of theLandesbanks and the increasing predominance of regional concepts within thepublic banking sector.
The bank's Individual rating reflects its strong domestic asset managementfranchise, benefiting from distribution by the savings banks sector, low creditrisk, adequate capitalisation and the relative resilience of its revenuesdespite net money outflows until end-2006 following the crisis of its Germanflagship real estate fund DekaImmobilienFonds ("DekaImmo") in 2004/05. It alsotakes into account the bank's exposure to reputational and operational risk.
In mid-2006, the bank's management initiated measures to reposition andreorganise the bank and intensify cooperation with the savings banks, whichconstitute DekaBank's main distribution channel. Fitch expects DekaBank'soperating performance to improve from 2007, as these measures are provingsuccessful and DekaImmo's restructuring was completed at end-2006. However, inFitch's view, the bank needs to establish a track record of rising net sales andassets under management (excluding price effects) to feed into commission incomegrowth, which, in conjunction with efficiency gains, would result into increasedprofitability. During H107 DekaBank enjoyed net new money inflows, driven bymoney market funds and funds of funds. With a 6.8% Tier 1 ratio according to BISat end-2006, the bank's capitalisation remained adequate despite supporting thetroubled fund out of own reserves in the three years to end-2006.
DekaBank is a central institution of the German public banking sector and itsmain asset manager, as well as the second-largest asset manager in Germany. At end-June 2007, it had assets under management of EUR190bn. DekaBank is owned 50/50 by the German savings banks, represented by their association, and 10Landesbanks.
A report on this entity will be available shortly on the agency's subscriptionwebsite, www.fitchresearch.com, under Financial Institutions/Banks/Full RatingReports.
Contact: Andrea von Schnurbein, Frankfurt, Tel: +49 69 7680 76248; Thomas vonLuepke, +49 69 7680 76150.
Media Relations: Horst Bertram, Frankfurt, Tel: +49 69 7680 76130; HannahWarrington, London, Tel: +44 (0) 207 417 4222.
Fitch's rating definitions and the terms of use of such ratings are availableon the agency's public site, www.fitchratings.com. Published ratings, criteriaand methodologies are available from this site, at all times. Fitch's code ofconduct, confidentiality, conflicts of interest, affiliate firewall, complianceand other relevant policies and procedures are also available from the 'Code ofConduct' section of this site.
(END) Dow Jones Newswires 07-31-07 1058ET Copyright (c) 2007 Dow Jones & Company, Inc.
