Fitch Affirms VTB Bank (Ukraine) at ‘BB-’; Outlook Positive
March 27, 2008 Сbonds
Fitch Ratings-London/Moscow-26 March 2008: Fitch Ratings has today affirmed the ratings of JSC VTB Bank (Ukraine) (VTBU) at Long-term foreign currency Issuer Default (IDR) 'BB-' (BB minus), Long-term local currency IDR 'BB', Short-term IDR 'B', Support '3', Individual 'D/E' and National Long-term 'AAA (ukr)'. The Outlooks for the Long-term foreign currency and local currency IDRs are Positive. The National Long-term rating has a Stable outlook.
VTBU’s IDRs reflect the potential support from its majority shareholder JSC Bank VTB (VTB; Long-term IDR ‘BBB+’/Stable), the second-largest state-owned bank in Russia, but the Long-term foreign currency IDR is constrained by the Country Ceiling for Ukraine. The Individual rating takes into account the bank’s rapid growth, modest profitability, growing reliance on its parent’s funding and only modest capitalisation, given significant borrower concentrations and low loan impairment reserve levels. The Individual rating also reflects the bank’s growing franchise and limited market risks.
The Positive Outlooks for VTBU’s Long-term IDRs reflect those of Ukraine’s sovereign ratings. Upward pressure on the bank’s Long-term IDRs could result from an upgrade of the Country Ceiling for Ukraine. Upside potential for VTBU’s Individual rating is currently limited. Downward pressure might arise mainly from weakened asset quality.
VTBU is a medium-sized Ukrainian bank, ranked sixteenth by assets in Ukraine after the merger with Vneshtorgbank Ukraine in November 2007 (the latter had assets of USD463m at end-2007). VTB currently owns more than 99% of VTBU.
Company — VTB Bank Ukraine
Full namePublic Joint-Stock Company "VTB Bank"