...Parent Constrains Ratings: UniCredit Bank AG's (HVB) Issuer Default Ratings (IDRs) are based on its Viability Rating (VR), which benefits from its strong capitalisation. HVB remains significantly better capitalised than its domestic peers, even after a special dividend paid in 2Q17 to its parent, UniCredit S.p.A. (UC; BBB/Stable/bbb). HVB's VR also reflects its largely wholesale business model based on a significant domestic corporate and investment banking (CIB) franchise, solid asset quality and moderate profitability. UC's ratings constrain HVB's VR and, consequently, its IDRs, as a subsidiary would typically not be rated more than a notch above its parent within the eurozone, in Fitch Ratings' view. Strong Capitalisation: HVB's fully loaded common equity Tier 1 (CET1) ratio was 21.2% at end-1H17, following the EUR3 billion exceptional dividend to UC in 2Q17. This payment supports our expectation that capital is increasingly managed at group level. This increases the pressure on HVB's...
