Fitch lowers Meinl Bank

Fitch Ratings said it downgraded Meinl Bank AG’s long-term issuer default rating to B- from B and viability rating to B- from B.

Both ratings also were placed on Rating Watch negative, along with its short-term issuer default rating of B.

The downgrades reflect a view that the bank’s franchise will likely weaken as a result of the request by the Austrian Financial Market Authority to replace the bank’s two management board members within three months, Fitch said.

The negative watch considers the possibility that further regulatory action could damage the bank’s viability further, the agency said.

The bank’s management and strategy are under pressure from regulatory demands to replace its management board and put in place remedial action following a regulatory review completed in July, Fitch said.

The review identified serious shortcomings at the bank and authorities have expressed concerns about the management board’s ability to run the bank according to regulatory requirements, the agency added.

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