Fitch Downgrades VTB Armenia to ‘BB’ on Sovereign Downgrade
August 17, 2009 Fitch Ratings
Fitch Ratings-London/Moscow-14 August 2009: Fitch Ratings has today downgraded Armenia-based VTB Bank’s (VTBA) Long-term foreign and local currency Issuer Default ratings (IDRs) to 'BB' from 'BB+'. The Outlooks on the ratings are Stable. These actions follow the downgrade of Armenia's Long-term foreign and local currency IDRs to 'BB-' from 'BB' with Stable Outlooks and Country Ceiling to 'BB' from 'BB+'. (see separate announcement on www.fitchratings.com). The full list of rating actions are provided at the end of this announcement
The downgrade on VTBA’s IDRs reflects the downgrade of Armenia's Country Ceiling, which captures transfer and convertibility risks and limits the extent to which support from the sole shareholder of VTBA, Russia's state-owned VTB Bank (VTB, 'BBB'/Negative), can be factored into its Long-term IDRs.
VTBA is Armenia's fourth-largest bank in term of total assets, with 10.4% of the banking system's loans and 6.4% of customer deposits at end-H109. 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 and is supported by an extensive branch network consisting of 78 branches located across the country.
Bank VTB Bank (Armenia) CJSC
Long-term foreign currency IDR: downgraded to ‘BB’ from ‘BB+’; Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Long-term local currency IDR: downgraded to ‘BB’ from ‘BB+’; Outlook Stable
Short-term local currency IDR: affirmed at 'B'
Individual Rating: affirmed at 'D/E'
Support Rating: affirmed at '3'
Company — VTB (Armenia)
Full nameAO "VTB Bank" (Armenia)