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San Marino ratings affirmed with stable outlook - Fitch
Real estate news By Thomson Financial
10.01.07, 9:27 AM ET
MUMBAI (Thomson Financial) - Fitch Ratings affirmed the Republic of San Marino's long-term foreign currency issuer default ratings at 'AA' with a stable outlook. Fitch also affirmed San Marino's short-term IDR at 'F1+', and country ceiling at 'AAA'.
San Marino's sovereign rating is supported by high GDP per capita, strong economic growth and the authorities' success in bringing the public finances under control after a decade of declining government revenue prior to 2002, Fitch said. The Sammarinese economy has benefited greatly from its banking sector, which successfully weathered an outflow of foreign deposits in 2002 and is now making a significant contribution to GDP growth and economic diversification, the agency added.
Fitch believes that over time the Sammarinese banks' competitiveness vis-a-vis other countries will diminish as the European Union presses for greater transparency. Intensified competition in the banking sector and lower interest rates in Italy have cut Sammarinese banks' profitability and given rise to a willingness to take on more risk at the margin. Concerns are mitigated by the strong capitalisation of the banks, Fitch said.
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