Fitch: Sovereign support crucial for Austrian banks in 2013

12 December 2012

Austria's banks will continue to rely on government support to maintain their credit ratings in 2013, according to Fitch.

In a new report, the ratings agency said the "standalone creditworthiness" of the institutions has shown improvement in recent months, but their viability ratings (VRs) will not improve sufficiently to replace sovereign backing as the banks' main "rating driver" next year.

Fitch added that downside risks to the VRs of Austrian banks have abated this year and the agency expects the ratings to remain broadly stable over the next 12 months.

However, the agency also said that the macroeconomic outlook for the country and the wider Central and Eastern Europe region is still fragile, with the volume growth of Austrian banks likely to be "selective and cautious" next year.

A report published by Fitch last week stated that the 2013 outlook for the Spanish banking industry remains negative as the nation's economic woes continue.

By Asim Shah

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