International rating agency Fitch Ratings has affirmed at BBB+ its long-term issuer default ratings (IDRs) on two Russian foreigner-owned banks — Danske Bank and SEB Bank — with a positive outlook.
As the agency specified in a press release, the following rating actions were taken with regard to both banks: the long-term foreign currency IDR was affirmed at BBB+, a positive outlook; the short-term foreign currency IDR at F2; the long-term national scale rating at AAA(rus), a stable outlook; the support rating at 2.
Long-term and short-term IDRs and the support ratings of Danske Bank and SEB Bank reflect a high chance of support if required fr om its sole shareholders Danske Bank (A+/negative) and Scandinaviska Enskilda Banken (SEB, A+/stable), respectively, Fitch points out. Both Danske Bank and SEB Bank are highly integrated with their parent structures, including business processes and risk management, have lim ited authority to approve risks in their regions of operations (although this authority is slightly higher at Danske Bank), the parent structures guarantee most of their credits, they have a single brand name with the parent banks, and there is also evidence of assistance provided in the past.
The ratings of Danske Bank and SEB Bank are still constrained by Russia’s country ceiling (BBB+). An upgrade of the country ceiling would be a primary rating factor for the banks’ long-term IDRs, the rating agency’s analysts point out.
Danske Bank is a small bank based in Saint Petersburg. At the end of 2010 Danske Group provided 43% of Russia-based Danske Bank’s funding and guaranteed 90% of its credit portfolio, Fitch said in a note.
As Banki.ru data show, as of August 1, 2011 Danske Bank’s net assets stood at Rub 5.15 bln (No. 324 in Russia), capital (calculated in line with CBR requirements) came to Rub 1.37 bln and the credit portfolio totaled Rub 3.00 bln.
SEB Bank is a small bank based in Saint Petersburg, a subsidiary of European banking group Skandіnavіska Enskіlda Banken. Its primary business focus is providing loans to commercial enterprises, mainly trade and industrial concerns.
As Banki.ru data show, as of August 1, 2011 SEB Bank’s net assets stood at Rub 8.13 bln (No. 252 in Russia), capital (calculated in line with CBR requirements) came to Rub 2.69 bln, the credit portfolio totaled Rub 7.01 bln and obligations to households equaled Rub 160 mln.
