Fitch Affirms VTB Bank (Belarus) at ‘B’
December 31, 2008 Fitch Ratings
Fitch Ratings has today affirmed the ratings of VTB Bank (Belarus) (VTBB), including its Long-term Issuer Default Rating (IDR) of ‘B’ with a Stable Outlook and its Individual Rating of ‘E’. A full list of the bank’s ratings follows at the end of this commentary.
VTBB’s IDRs and Support Rating of ‘4’ reflect Fitch’s view on the probability of support which could be provided by the bank’s parent, JSC Bank VTB (VTB – Long-term IDR ‘BBB+’ /Outlook Negative/Individual ‘C/D’), the second largest state-owned bank in Russia. Fitch also notes the small size of VTBB relative to VTB. At the same time, the ability of VTB to provide support to its Belarusian subsidiary may be constrained by Belarusian transfer/convertibility risks.
VTBB’s Individual Rating reflects the risks arising from its extremely rapid recent asset growth, high concentrations on both sides of its balance sheet, the weaknesses in the operating environment and its potentially vulnerable stand-alone liquidity resulting mostly from short-term customer funding. In November 2008, VTBB received a USD100m credit facility from VTB Bank (Austria) AG (‘BBB’), a European subsidiary of VTB, to offset a (mainly planned) outflow of customer funding.
Upward or downward pressure on VTBB’s IDRs and Support Rating is contingent on the improvement or deterioration in Belarusian transfer/convertibility risks, and hence the state of Belarusian government finances. Upside potential for the bank’s Individual Rating is currently limited.
VTBB, formerly Slavneftebank, is a universal bank, predominantly focused on serving corporate customers. At end-November 2008, VTBB ranked eighth by asset size in Belarus, with a 2.2% market share in banking system assets, 2.3% in corporate lending and 0.8% in retail deposits. VTBB is 64.9% owned by VTB.
VTBB’s ratings have been affirmed as follows:
Long-term foreign currency IDR: affirmed at 'B'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Support Rating: affirmed at '4'
Individual Rating: affirmed at 'E'
Company — VTB (Belarus)
Full nameCJSC VTB Bank (Belarus)