Fitch Ratings Agency affirms VTB Bank (Armenia) at “BB”, outlook positive
27.10.2007,
03:47
Fitch Ratings international agency affirmed VTB Bank (Armenia) at “BB”, Outlook Positive.
YEREVAN, October 26. /ARKA/. Fitch Ratings international agency affirmed VTB Bank (Armenia) at “BB”, Outlook Positive.
The agency affirmed the ratings of VTB (Armenia) at Long-term foreign and local currency Issuer Default (IDR) 'BB', Short-term foreign and local currency IDR 'B', Individual 'D/E' and Support '3'. The Outlooks for the Long-term IDRs remain Positive, reports the website of Fitch Ratings.
According to the report, the IDRs and Support rating reflect the moderate probability of support being forthcoming, if required, from VTBA's sole shareholder, Russia's JSC Bank VTB (VTB, Long-term IDR 'BBB+'). 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'.
The Positive Outlook on VTBA's ratings reflects that on the sovereign's ratings and the probability, therefore, of the Country Ceiling going up.
The Individual rating reflects VTBA's small size by international standards, high loan concentration, significant loan impairment levels, rapidly growing and unseasoned retail loan book and modest profitability. The rating also takes into account the bank's significant domestic franchise, sound capitalisation and adequate liquidity position. VTBA's overall competitive profile has been enhanced following a restructuring by its new shareholder with stronger emphasis on the rationalisation of its low-efficiency large branch network and diversification of the funding base.
VTB (Armenia) is Armenia's seventh-largest bank, with 8% of the banking system's loans and retail deposits at the end of first half of 2007. VTB acquired a 70% stake in VTB (Armenia) 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 origins to a branch of Sberbank of the USSR, established in 1923. The bank services both corporate and retail clients, supported by an extensive branch network consisting of 89 branches located all over the country. N.V. –
The agency affirmed the ratings of VTB (Armenia) at Long-term foreign and local currency Issuer Default (IDR) 'BB', Short-term foreign and local currency IDR 'B', Individual 'D/E' and Support '3'. The Outlooks for the Long-term IDRs remain Positive, reports the website of Fitch Ratings.
According to the report, the IDRs and Support rating reflect the moderate probability of support being forthcoming, if required, from VTBA's sole shareholder, Russia's JSC Bank VTB (VTB, Long-term IDR 'BBB+'). 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'.
The Positive Outlook on VTBA's ratings reflects that on the sovereign's ratings and the probability, therefore, of the Country Ceiling going up.
The Individual rating reflects VTBA's small size by international standards, high loan concentration, significant loan impairment levels, rapidly growing and unseasoned retail loan book and modest profitability. The rating also takes into account the bank's significant domestic franchise, sound capitalisation and adequate liquidity position. VTBA's overall competitive profile has been enhanced following a restructuring by its new shareholder with stronger emphasis on the rationalisation of its low-efficiency large branch network and diversification of the funding base.
VTB (Armenia) is Armenia's seventh-largest bank, with 8% of the banking system's loans and retail deposits at the end of first half of 2007. VTB acquired a 70% stake in VTB (Armenia) 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 origins to a branch of Sberbank of the USSR, established in 1923. The bank services both corporate and retail clients, supported by an extensive branch network consisting of 89 branches located all over the country. N.V. –
