...Diminishing Support Drives Outlook: The Negative Outlook on Commerzbank AG's (CBK) Long-Term IDR, which is at its Support Rating Floor (SRF), reflects a clear intention to ultimately reduce implicit support for banks in the EU, evidenced by the Bank Recovery and Resolution Directive (BRRD). Fitch Ratings is likely to revise CBK's SRF to `No Floor' and downgrade its Long-Term IDR, most likely by four notches to the level of its Viability Rating (VR), and Short-Term IDR by end-June 2015. Some Restructuring Success: CBK's VR reflects progress in de-risking and cost containment. CBK is now better positioned to protect its franchise in a competitive domestic market. CBK's performance has been helped by the favourable German economy and notably the low number of corporate insolvencies. Downside Risks Remain: Risk centres on activities pooled in the NCA segment, including asset-based lending (commercial real estate and ship finance) and CBK's public sector business, which is vulnerable to any...
