Fitch Rates Belarus’s Slavneftebank at ‘B’; Outlook Stable
October 10, 2007
Fitch Ratings has assigned today Slavneftebank (SNB) ratings of Long-term Issuer Default rating (IDR) 'B', Short-term IDR 'B', Individual 'E' and Support '4'. The Outlook for the Long-term IDR is Stable. The bank's Long-term IDR is at Belarus’s Country Ceiling.
The Long- and Short-term IDRs and Support rating reflect the moderate probability of support forthcoming, if required, from SNB’s majority shareholder, Russia’s Bank VTB (VTB, rated ‘BBB+’). In Fitch’s view, VTB would have a strong propensity to support SNB, if required, although the ability of SNB to receive this support may be constrained by Belorussian country risks, in particular transfer and convertibility risks, as reflected in the Country Ceiling.
The Individual rating reflects SNB’s high credit concentration risk, weak funding profile and susceptibility to liquidity risk. It also takes into account its still reasonable asset quality (despite the recently increased impairment levels) and good earnings performance. With the new shareholder, VTB, Fitch expects to see a strengthened competitive position of the bank and better diversification of its revenue stream.
SNB is a Belorussian bank, with USD440m assets at 1 July 2007, focusing on corporate and retail lending. It has six branches covering the key regions of Belarus. VTB holds a controlling 50%-plus-one share stake in the bank and plans to further increase its stake.
Company — VTB (Belarus)
Full nameCJSC VTB Bank (Belarus)