The Fitch Ratings Banks Group has worked to make Fitch Ratings an industry leader in bank credit rating coverage. The Group has developed a unique procedure for assessing banks and assigning them both issuer and issue ratings. The essential basis for the issuer rating is an assessment of the intermediate individual financial strength of the financial institution itself, as well as the likelihood and source of external support should the financial institution experience financial difficulties.
Quantitative aspects of a bank's strengths and weaknesses are reviewed such as balance sheet integrity, profitability, and risk management. The analysts also evaluate qualitative factors of the financial franchise in question such as strategy and quality of management, the environment in which it operates, and the most likely future development of its business. Final rating determinations are made by committees comprised of lead analysts and independent members, including Fitch senior management.
Coverage
Fitch has developed two special rating scales for banks:
> Individual ratings, measuring stand-alone financial strength
> Support ratings, providing an opinion on the likelihood and source of external support, should a bank experience financial difficulties
Ratings guidelines are applied to:
> Long and short-term foreign currency ratings
> Long and short-term local currency ratings
> National ratings for emerging markets (non-comparable across borders)
