Tuesday, August 17 2010 13:05
Fitch Withdraws VTB Bank (Armenia)'s Ratings
ArmInfo. Fitch Ratings has affirmed and withdrawn the ratings of VTB Bank (Armenia) (VTBA), including its Long-term Issuer Default ratings (IDR) at 'BB', Fitch Ratings told ArmInfo.
The IDRs of VTBA reflect Fitch's view of the moderate probability of support being forthcoming, if required, from its owner, Russia's JSC VTB Bank (VTB; 'BBB'/Stable/'F3'). This is based on VTB's 100% ownership, the strategic importance of CIS markets for VTB and the small size of VTBA relative to its parent. However, the extent to which this support can be factored into the ratings is limited by Armenian transfer and convertibility risks, as captured in the 'BB' Country Ceiling.
VTBA held 10% of sector loans and 7% of retail deposits at end-Q110. Fitch will no longer provide ratings or analytical coverage of VTBA. The rating actions are as follows: Bank VTB Bank (Armenia) CJSC Long-term foreign and local currency IDRs: affirmed at 'BB' with Stable Outlook; withdrawn Short-term foreign and local currency IDRs: affirmed at 'B'; withdrawnIndividual Rating: affirmed at 'D/E'; withdrawn Support Rating: affirmed at '3'; withdrawn
The Individual Rating of 'D/E' reflects the high proportion of foreign currency loans, operational risks associated with its branch network, the still significant dependence on the parent for funding and liquidity support and a difficult, albeit improving, operating environment. However, it also takes into account the bank's solid capitalisation, the recent stabilisation of asset quality metrics and the significant domestic franchise.
Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 29 December 2009, are available at www.fitchratings.com
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