Fitch Rates VTB Bank (Austria) AG ‘BBB’; Outlook Stable
July 30, 2008
Fitch Ratings-London/Moscow-30 July 2008: Fitch Ratings has today assigned VTB Bank (Austria) AG (VTBA) ratings of Long-term Issuer Default (IDR) 'BBB' with a Stable Outlook, Short-term IDR 'F3', Support '2' and Individual 'C/D'.
VTBA’s IDRs and Support rating reflect the high potential support from its 100% owner, JSC Bank VTB (VTB; rated ‘BBB+’/Stable), the second-largest state-owned bank in Russia, in case of need. VTBA’s Individual rating takes into account the bank’s exposure to Russia, reliance on wholesale funding and notable market risk, most of which, however, come as a side-effect from significant credit-driven bond/CDS exposures. The Individual rating also takes into account a strong regulatory environment, the bank’s sound capitalisation and reasonable profitability, also reflecting good cost-efficiency. Upward pressure on the Individual rating is currently limited. Downward movement could result mainly from a major liquidity shortfall or marked deterioration of asset quality.
The Stable Outlook for VTBA’s Long-term IDR mirrors that of VTB’s Long-term IDR. Any movement in VTB’s Long-term IDR would likely affect the ratings of VTBA.
VTBA’s core businesses are structured trade finance, and structuring and syndication of loans for Russian/CIS clients. Most of them are also clients of VTB. In December 2007, as part of the restructuring of VTB’s European subsidiaries, stakes in VTB Bank (France) (rated ‘BBB’/Stable) and VTB Bank (Deutschland), previously held by VTB Bank Europe Plc (rated ‘BBB’/Stable), were transferred to VTBA.
Company — VTB Bank Austria
Full nameVTB Bank (Austria) AG