The public information ('pi') rating on Poland-based BRE Bank S.A. reflects its increased strategic importance for, and integration with, its strategic shareholder, Germany-based Commerzbank AG (A-/Stable/A-2). The rating also factors in a significant reduction in the high-risk investment portfolio, improving loan quality and financial performance, and satisfactory funding. Offsetting rating factors are BRE's just adequate capitalization and increasingly pressured margins due to intensified competition in the banking sector. BRE is the fifth-largest bank in Poland, with consolidated assets of Polish zloty (PLZ) 38.9 billion (€9.6 billion at PLZ4.07 to €1) at midyear 2006 and a market share of 6.3% in corporate lending and 3.9% in retail lending. BRE is considered a strategically important subsidiary to Commerzbank, which holds a 70.3%
