Fitch Upgrades VTB Bank (Armenia) Upon Sovereign Rating Upgrade
July 9, 2008
Fitch Ratings-London/Moscow- 09 July 2008: Fitch Ratings has today upgraded Armenia-based VTB Bank’s (VTBA) Long-term foreign and local currency Issuer Default ratings (IDRs) to ‘BB+’ from ‘BB’. At same time, Fitch has affirmed VTBA’s Short-term foreign and local currency IDRs at ‘B’, and Individual and Support ratings at ‘D/E’ and ‘3’, respectively. The Outlooks for the Long-term foreign and local currency IDRs are Stable. These actions follow the upgrade of Armenia’s Long-term foreign and local currency IDRs to ‘BB’ from ‘BB-’ (BB minus) with Stable Outlooks and Country Ceiling to ‘BB+’ from ‘BB’.
The IDRs and Support rating reflect the moderate probability of support forthcoming, if required, from VTBA's sole shareholder, Russia's VTB Bank (VTB, 'BBB+'/Stable). In Fitch's view, VTB would have a strong propensity to support VTBA, if required, although the ability of VTBA to receive and utilise this support may be constrained by Armenian country risks, in particular transfer and convertibility risks, as reflected in the Country Ceiling of ‘BB+’.
VTBA is Armenia's fourth-largest bank, with 10% of the banking system's loans and 7% of retail deposits at end-2007. VTB acquired a 70% stake in VTBA in March 2004 and the remaining 30% in July 2007. VTBA (formerly known as Armsberbank) has a long history of operations in Armenia and traces its origin to a branch of Sberbank of the former USSR, established in 1923. The bank services both corporate and retail clients, supported by an extensive branch network consisting of 89 branches located across the country.
Company — VTB (Armenia)
Full nameAO "VTB Bank" (Armenia)