...Viability-Driven IDRs: Bank Millennium's (BM) IDRs are driven by its standalone strength, expressed in its Viability Rating (VR). The Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch Ratings' view of the moderate probability of support BM will receive from Poland, if needed, given its significant market share in domestic retail deposits. BM's VR reflects its fairly strong market franchise, modest risk appetite, solid capitalisation and supportive operating environment. However, it is constrained by the bank's material (albeit declining) exposure to foreign-currency (FC) mortgages and substantial FC refinancing needs. Sizeable FC Exposure: Currency-induced credit risks from FC retail mortgages have been mitigated by stable local currency and low market interest rates. However, a strong and prolonged weakening of the Polish zloty and market interest rate increase, combined with a deteriorating operating environment, would impair borrowers' payment abilities and drive up defaults....
