Fitch Ratings

Fitch Ratings Inc. is one of the "Big Three credit rating agencies",[3] the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975.

Fitch Ratings is headquartered in New York, US.[4] Hearst owns 100 percent of the company following its acquisition of an additional 20 percent for $2.8 billion on April 12, 2018.[2] Hearst had owned 80 percent of the company after increasing its ownership stake by 30 percent on December 12, 2014, in a transaction valued at $1.965 billion. Hearst's previous equity interest was 50 percent following expansions on an original acquisition in 2006.

Hearst had jointly owned Fitch with FIMALAC SA, which held 20 percent of the company until the 2018 transaction. Fitch Ratings and Fitch Solutions are part of the Fitch Group.

The firm was founded by John Knowles Fitch on December 24, 1914, in New York City as the Fitch Publishing Company. In 1989, the company was acquired by a group including Robert Van Kampen.[5] In 1997, Fitch was acquired by FIMALAC and was merged with London-based IBCA Limited, a FIMALAC subsidiary.[6] In 2000 Fitch acquired both Chicago-based Duff & Phelps Credit Rating Co. (April) and Thomson Financial BankWatch (December).

Fitch Ratings is the smallest of the "big three" NRSROs, covering a more limited share of the market than S&P and Moody's, though it has grown with acquisitions and frequently positions itself as a "tie-breaker" when the other two agencies have ratings similar, but not equal, in scale.

In September 2011, Fitch Group announced the sale of Algorithmics (risk analytics software) to IBM for $387 million.[9] The deal closed on October 21, 2011.[10]

Fitch Ratings Inc.
Subsidiary
IndustryFinancial services
Founded1914
FounderJohn Knowles Fitch
Headquarters
Key people
Paul Taylor
CEO , Ian Linnell, president, Theodore E. Niedermayer
CFO
RevenueIncrease $732.5 million (2011) [1]
OwnerHearst Corporation[2]
Number of employees
2,500 (approximate)
Websitefitchratings.com

Investment scale

Fitch Ratings' long-term credit ratings are assigned on an alphabetic scale from 'AAA' to 'D', first introduced in 1924 and later adopted and licensed by S&P. (Moody's also uses a similar scale, but names the categories differently.) Like S&P, Fitch also uses intermediate +/− modifiers for each category between AA and CCC (e.g., AA+, AA, AA−, A+, A, A−, BBB+, BBB, BBB−, etc.).

Investment grade

  • AAA : the best quality companies, reliable and stable
  • AA : quality companies, a bit higher risk than AAA
  • A : economic situation can affect finance
  • BBB : medium class companies, which are satisfactory at the moment

Non-investment grade

  • BB : more prone to changes in the economy
  • B : financial situation varies noticeably
  • CCC : currently vulnerable and dependent on favorable economic conditions to meet its commitments
  • CC : highly vulnerable, very speculative bonds
  • C : highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
  • D : has defaulted on obligations and Fitch believes that it will generally default on most or all obligations
  • NR : not publicly rated

Short-term credit ratings

Fitch's short-term ratings indicate the potential level of default within a 12-month period.

  • F1+ : best quality grade, indicating exceptionally strong capacity of obligor to meet its financial commitment
  • F1 : best quality grade, indicating strong capacity of obligor to meet its financial commitment
  • F2 : good quality grade with satisfactory capacity of obligor to meet its financial commitment
  • F3 : fair quality grade with adequate capacity of obligor to meet its financial commitment but near term adverse conditions could impact the obligor's commitments
  • B : of speculative nature and obligor has minimal capacity to meet its commitment and vulnerability to short term adverse changes in financial and economic conditions
  • C : possibility of default is high and the financial commitment of the obligor are dependent upon sustained, favorable business and economic conditions
  • D : the obligor is in default as it has failed on its financial commitments.

Fitch Solutions

Launched in 2008, Fitch Solutions offers a range of fixed-income products and professional development services for financial professionals. The firm also distributes Fitch Ratings' proprietary credit ratings, research, financial data, and analytical tools.

Criticism

The main credit rating agencies, including Fitch, were accused of misrepresenting the risks associated with mortgage-related securities, which included the CDO market. There were large losses in the collateralized debt obligation (CDO) market that occurred despite being assigned top ratings by the CRAs.

For instance, losses on $340.7 million worth of collateralized debt obligations (CDO) issued by Credit Suisse Group added up to about $125 million, despite being rated AAA by Fitch.[7] However, differently from the other agencies, Fitch has been warning the market on the constant proportion debt obligations (CPDO) with an early and pre-crisis report highlighting the dangers of CPDO's.[8]

See also

References

  1. ^ Group, Fitch. "2011 Fiscal". FIMALAC. Retrieved 26 March 2012.
  2. ^ a b "Fitch Group Becomes a Wholly-Owned Hearst Business". hearst.com. Retrieved April 12, 2018.
  3. ^ Blumenthal, Richard. "Three credit rating agencies hold too much of the power - Juneau Empire - Alaska's Capital City Online Newspaper". www.juneauempire.com. Retrieved 19 March 2018.
  4. ^ http://hugin.info/143461/R/1601708/505879.pdf
  5. ^ "Group Buys Fitch Investors". Wall Street Journal, Eastern edition; New York, N.Y. New York, N.Y., United States, New York, N.Y. 1989-04-21. p. 1. ISSN 0099-9660. Retrieved 2018-05-09 – via ProQuest.
  6. ^ Lavin, Douglas (1997-10-17). "France's Fimalac Purchases Fitch From Van Kampen". Wall Street Journal, Eastern edition; New York, N.Y. New York, N.Y., United States, New York, N.Y. pp. –4. ISSN 0099-9660. Retrieved 2018-05-09 – via ProQuest.
  7. ^ Tomlinson, Richard; Evans, David (2007-06-01), "CDOs mask huge subprime losses, abetted by credit rating agencies", International Herald Tribune
  8. ^ Linden, Alexandre; Neugebauer, Matthias; Schiavetta, John; Zelter, Jill; Hardee, Rachel (2007-04-18), First Generation CPDO: Case Study on Performance and Ratings

External links

Algorithmics Inc.

Algorithmics was a Toronto, Ontario based company founded by Ron Dembo that provided risk management software to financial institutions. Founded in 1989, Algorithmics employed over 850 people in 23 global offices, and served more than 350 clients, including 25 of the 30 largest banks in the world, and over two thirds of the CRO Forum of leading insurers.

In January 2005, Algorithmics was acquired by Fitch Group for $175 million, which is also the parent company of Fitch Ratings.In October 2011, Algorithmics was acquired by IBM for $387 million. IBM OpenPages and Algorithmics will be combined to form a new Risk Analytics pillar within the Business Analytics software division.

Algorithmics was voted as the leading enterprise risk firm for market risk, economic capital risk calculation, risk dashboards and collateral management in Risk magazine's 2010 Technology Rankings. Algorithmics was also selected as the best Risk Analytics Solution Provider in Waters magazine's annual financial technology rankings. In 2011, Algorithmics won the Life and Pension Risk award for Best Solvency II provider. In 2007, Algorithmics was selected as one of Canada's Top 100 Employers, as published in Maclean's magazine.

Amana Bank (Sri Lanka)

Amãna Bank is the first and only Licensed Commercial Bank in Sri Lanka to conduct all its operations under the principles of Islamic banking and be fully disengaged from interest based transactions, offering the full spectrum of Retail Banking, SME Banking, Corporate Banking, Treasury and Trade Finance Services.

With the mission of Enabling Growth and Enriching Lives, the Bank reaches over 250,000 customers through a growing network of 28 branches and 4000+ ATM access points and has introduced a bouquet of customer conveniences such as Internet & Mobile Banking, Online Account Opening, VISA Debit Card with SMS alerts, 365 Day Banking, Saturday Banking, Extended Banking Hours, 24x7 Cash Deposit Machines and Banking Units Exclusively for Ladies.

Amãna Bank PLC is a stand-alone institution licensed by the Central Bank of Sri Lanka and listed on the Colombo Stock Exchange with Jeddah based IDB Group being the principal shareholder having a 29.97% stake of the Bank. The IDB Group is a ‘AAA’ rated multilateral development Financial institution with a capital base of over USD 150 Billion which has a membership of 57 countries. Powered by the stability and support of the IDB Group along with other strategic shareholders including Bank Islam Malaysia, AB Bank of Bangladesh and Akbar Brothers, Amãna Bank is making strong inroads within the Sri Lankan banking industry and is focused on capitalizing on the growing market potential for its unique banking model across the country.

The bank's head office is located at 486 Galle Road, Colombo, and it maintains branches at 29 locations around the country.In April 2015, Fitch Ratings assigned Amana Bank PLC a rating of ("BB" with a Stable Outlook).

Banco Nacional de Costa Rica

Banco Nacional de Costa Rica or BNCR is the largest commercial bank in Costa Rica and the second largest in Central America by assets.

It has a 49% stake in Banco de Costa Rica International Limited (BICSA), incorporated with the Republic of Panama entity, and 100% of the shares of BN-Securities (Stock Exchange Market), BN-Vital (Operator owner pension fund), BN-SAFI (Mutual Funds) and BN insurance broker. in January 2013, the Fitch Ratings classified Banco Nacional de Costa Rica as an 'AA + (cri)' class bank.

Bank of Georgia

Bank of Georgia (abbreviated as BOG or BoG) is a Georgian bank headquartered in Tbilisi, Georgia. It is the largest bank in Georgia by assets.99.52% of the share capital of Bank of Georgia is held by BGEO Group PLC, a public limited liability company incorporated in England and Wales with registered number 07811410. The shares of BGEO were admitted to the premium listing segment of the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange PLC’s main market for listed securities on 28 February 2012.Bank of Georgia has credit ratings from: S&P: ‘BB -’, Moody's: ‘B1/Ba3’ (foreign and local currency), and Fitch Ratings: ‘BB-’; outlooks are ‘Stable’.

Capital Services Group

Capital Services Group (CSG) is an independent asset management firm established in 1998. Its flagship operation is in Tokyo, Japan, with offices in Thailand, Singapore, Malaysia, Taiwan and the U.S.

Council of Europe Development Bank

The Council of Europe Development Bank (French: CEB, Banque de Développement du Conseil de l'Europe) dates from 1956, when the Council of Europe established the Resettlement Fund for National Refugees and Over-Population in Europe as a Partial Agreement. In 1994, it changed its name to the Council of Europe Social Development Fund, before becoming the Council of Europe Development Bank in 1999.Situated in Paris, the Bank is a separate legal entity and is autonomous in its decision-making. It has an excellent credit rating from Moody's, Standard and Poor's. and Fitch Ratings.The original aim was to help refugees and other displaced persons after the Second World War. It later expanded its scope of activities to include assistance to disaster victims, help with job creation, and improve social infrastructure. Its aim today is to promote social cohesion in its member states.

The CEB acts as a development bank, granting loans to member states. In 2016, its assets stood at 25.6 billion euros, which it uses to co-finance projects by means of loans of up to 40% of the project cost.

The current governor is Rolf WENZEL, born in 1954, of German nationality.

Credit rating

A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting.

The credit rating represents an evaluation of a credit rating agency of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts.

Credit reporting (or credit score) – is a subset of credit rating – it is a numeric evaluation of an individual's credit worthiness, which is done by a credit bureau or consumer credit reporting agency.

DBRS

DBRS is a global credit rating agency (CRA) founded in 1976 (originally known as Dominion Bond Rating Service) in Toronto. Its current ownership group, led by The Carlyle Group and Warburg Pincus, announced the purchase of the company in December 2014.DBRS, which has offices in Toronto, New York, Chicago, London, Frankfurt and Madrid, is the fourth-largest credit rating agency by global market share, with approximately between 2% and 3% of global market share. DBRS comprises four affiliated operating companies – DBRS Limited; DBRS, Inc.; DBRS Ratings Limited; DBRS Ratings GmbH; and DBRS Ratings GmbH, Sucursal en España.

Stephen Joynt was named CEO in August 2016, having previously served as chairman of the board. Mr. Joynt previous served as CEO of Fitch Ratings.Registered with the U.S. Securities and Exchange Commission (SEC) as a Nationally Recognized Statistical Rating Organization (NRSRO) pursuant to the Credit Rating Agency Reform Act of 2006 (CRA Reform Act) and the rules adopted thereunder.

DBRS is registered as a Nationally Recognized Statistical Rating Organization from the United States' Securities and Exchange Commission (SEC), one of only 10 companies to hold the designation.Registered as a CRA in the European Union (EU) in accordance with Regulation (EC) No 1060/2009 of the European Parliament, amended by Regulation (EU) No 513/2011 and No 462/2013 on CRAs (the EU CRA Regulation).and with the Ontario Securities Commission (OSC) in Canada.

The company is one of only four CRAs, including larger competitors Standard & Poor's, Moody's Investors Service, and Fitch Ratings, to receive ECAI recognition from the European Central Bank (ECB). That designation indicates CRAs whose ratings can be used by the ECB to determine collateral requirements for borrowing from the ECB. In recent years, DBRS's sovereign ratings on European nations, including Portugal, Ireland and Italy, were used by the ECB for such purposes.

DFCC Bank

DFCC Bank was set up in 1955 as Sri Lanka's pioneer Development Finance Institution on the recommendation of the World Bank and is one of the oldest development banks in Asia.

In October 2015, DFCC Bank and its 99% owned subsidiary, DFCC Vardhana Bank amalgamated. DFCC Bank is now a Licensed Commercial Bank offering the range of development banking and commercial banking products and services.

DFCC Bank is rated AA-(lka) by Fitch Ratings (Lanka Limited)

Products and Services:

The Bank's primary lines of business are Corporate Banking, Branch and SME Banking, Small Business Enterprise Banking, Business Banking, Consumer Banking, Treasury and International Banking. The business lines are complemented by its subsidiaries, a joint venture and an associate company for services in consultancy, information technology, industrial estate management, investment banking and fund management.

The Bank offers the full range of development banking and commercial banking solutions through its growing island-wide branch network.

Dubai Bank

Dubai Bank was an Islamic bank based in Dubai, UAE. Launched in September 2002, the Bank became a Shari’a-compliant financial institution with a focus on the UAE’s Islamic banking sector on 1 January 2007. Dubai Bank is part of the Dubai Group, a Dubai Holdings company.

The bank increased its capital to AED 1.50 Billion in 2007 and is on an expansion spree, and as of March 2008 has total assets of AED 14.4 billion. The bank as of the end of 2007 has 15 branches spread across UAE and has more aggressive plans in 2008 including opening another 10 branches.

Fitch Ratings has recently assigned Dubai Bank Long-term Issuer Default rating (IDR) 'A' with a Stable Outlook, Short-term IDR 'F1', Support rating '1' and Support Rating Floor 'A'.

As per the pre orders from the Ruler of Dubai on 11 October 2011, Emirates NBD was set to take over Dubai Bank. There are no financial details available.29 November 2012 was the last day of Dubai Bank before Emirates Islamic Bank acquired it. On 1 December 2012 the operations of the bank were undertaken by Emirates Islamic Bank.

Etiqa

Etiqa is the insurance and takaful business of the Malaysian banking group Maybank. It offers life and general insurance as well as family and general takaful products through its 14,000 agents, 30 branches and 450 Maybank branches using the bancassurance model. Etiqa Insurance is one of the top conventional insurers in Malaysia by gross premiums written; while Etiqa Takaful is the takaful market leader with 47 percent and 21 percent market shares in general and family takaful respectively in 2014.Maybank's enlarged insurance arm was formed via the acquisition by Mayban Fortis (the then insurance holding company of Maybank) of MNI Holdings Berhad (whose subsidiaries included Malaysia National Insurance and Takaful Nasional) from Permodalan Nasional Berhad (PNB) and Skim Amanah Saham Bumiputera (a unit trust managed by PNB) in 2005. PNB/ASB is also the majority shareholder of Maybank. MNI was incorporated in 1973 and listed on the Kuala Lumpur Stock Exchange in 1981. In 2007, the combined business was rebranded as Etiqa.The Etiqa business comprises Etiqa Insurance Berhad and Etiqa Takaful Berhad. The two companies are owned by Maybank Ageas (the successor to Mayban Fortis) which is in turn 69 and 31 percent controlled by Maybank and Ageas respectively.Both Etiqa Insurance and Etiqa Takaful hold an 'A/Stable' Insurer Financial Strength (IFS) Rating assigned by Fitch Ratings as of June 2015.Etiqa storms ahead to meet the priorities advocated by BNM.Etiqa Triumphs as the Best Multi-channel Distributor of Takaful and Insurance Products.

Hearst Communications

Hearst Communications, often referred to simply as Hearst, is an American mass media and business information conglomerate based in New York City.Hearst owns newspapers, magazines, television channels, and television stations, including the San Francisco Chronicle, the Houston Chronicle, Cosmopolitan and Esquire. It owns 50% of the A&E Networks cable network group and 20% of the sports cable network group ESPN, both in partnership with The Walt Disney Company.While Hearst is perhaps better known for the above media holdings, the company also has significant businesses in the business information section, where it owns companies including Fitch Ratings, First Databank, and others.Hearst Communications is based in the Hearst Tower in Midtown Manhattan, New York City. The company was founded by William Randolph Hearst as an owner of newspapers, and the Hearst family remains involved in its ownership and management.

ICCREA Banca

ICCREA Group known formerly as Istituto Centrale delle Casse Rurali ed Artigiane, is a central institution of Italian credit unions and rural saving banks. The holding company of the group was ICCREA Holding (from 1995–2016), while ICCREA Banca, ICCREA BancaImpresa and several companies were subsidiaries. However, ICCREA Banca revered merger with ICCREA Holding in mid-2016, as part of the banking reform of Italy. The co-operative banks of Italy would create strong central banks (Cassa Centrale Banca had also applied to be another central bank) with power to recapitalize individual co-operative bank.

John Fitch

John Fitch may refer to:

John Fitch (computer scientist) (born 1945), computer scientist, mathematician and composer

John Fitch (inventor) (1743–1798), early American inventor, built the first steamboat in the United States in 1786

John Fitch, Massachusetts settler for whom Fitchburg, Massachusetts is named

John Fitch (racing driver) (1917–2012), racing driver, inventor of innovative safety devices and descendent of John Fitch (inventor)

John A. Fitch (1881–1959), writer and professor of labor relations

John H. Fitch, namesake of YMCA Camp Fitch in Springfield, Pennsylvania

John Knowles Fitch (1880–1943), founder of Fitch Ratings, Ltd

John Nugent Fitch (1840–1927), botanical illustrator

Olusegun Olutoyin Aganga

Olusegun Olutoyin Aganga (born 1955) was the Minister of Industry, Trade and Investment of Nigeria. He was first nominated by General Obasanjo and appointed by President Jonathan as Minister of Finance from 6 April 2010 to June 2011.

Spread Research

Spread Research SAS is a French credit rating agency and independent credit research company.The company was founded in 2004 and in 2013 became the first French credit rating agency to be authorised. The company is based in Lyon, France, and has a presence in London and Paris. Spread Research has been certified as credit rating agency by the European Securities and Markets Authority (ESMA) since mid-2013, allowing the company to operate in Europe.As of 2013, the company had 15 employees. In France, until 2013, only the branches of Standard and Poor's, Moody's and Fitch Ratings were certified by the ESMA. Spread Research operates under an investor-pays model, rather than being paid by rated companies.Spread Research has been awarded "Top 5 Best Credit Research" by Credit Magazine in 2010.

Sri Lanka Insurance

Sri Lanka Insurance Corporation Limited, also known as Sri Lanka Insurance is the largest and strongest composite insurance provider in Sri Lanka. It is the first and only insurance company in Sri Lanka to be assigned a prime AA- rating for Insurance Financial Strength from the US rating agency Fitch Ratings New York City. The company now manages assets worth over US$500 Million.

Taichung Bank

The Taichung Bank (Chinese: 台中銀行; pinyin: Táizhōng Yínháng; Pe̍h-ōe-jī: Tâi-tiong-gîn-hâng), officially Taichung Commercial Bank, is a public bank headquartered in Taichung, Taiwan.

In 2015, Fitch Ratings assigned ratings to Taiwan's Taichung Commercial Bank (TCB) as follows: 'BB+' (BB plus) Long-term Issuer Default Rating (IDR), 'B' Short-term IDR, 'A-(twn)' National Long-term rating, 'F2(twn)' National Short-term rating, 'bb+' Individual rating, '5' Support rating and 'NF' Support Rating Floor.

Tinkoff Bank

Tinkoff Bank (Russian: Тинькофф банк), formerly Tinkoff Credit Systems (Russian: Тинькофф Кредитные Системы) is a Russian commercial bank based in Moscow and founded by Oleg Tinkov in 2006. The bank does not have branches and is considered a neobank. As of 2016, Tinkoff Bank has a credit rating of B+ on the Fitch Ratings and B2 on the Moody's Rating, and is the second largest provider of credit cards in Russia.

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