Fitch Ratings affirmed its ratings on Moscow Bank for Reconstruction and Development (MBRD) and its subsidiary, Dalcombank, including the long-term issuer default ratings, at B+ with a negative outlook, the agency’s press service reported.
Furthermore, Fitch assigned a long-term national rating of A- to MBRD’s Rub 5 bln bond issue (with a fixed yield rate). The bonds are due February 2014, but bondholders may exercise a call option in March 2010.
“The issuer default ratings (IDR) of MBRD and Dalcombank are driven by the possibility of gaining support, if required, from AFK Sistema, a major shareholder of MBRD. Possible revisions of the banks’ ratings in the future will most likely depend on AFK Sistema’s long-term IDR and Fitch’s opinion whether or not the parent company is prepared to provide support to MBRD and Dalcombank. The negative outlook for the long-term IDRs assigned to MBRD and Dalcombank reflect the likelihood that AFK Sistema’s ability to lend support could weaken in the future," the press service pointed out.
“If the quality of assets continues to deteriorate further down the road, this could take a toll on independent financial positions of the lenders and exert an adverse impact on their individual ratings. The rating upgrade potential is very limited at the moment given ongoing trends in the operating environment and devaluation of credits," a press release said.
According to the data from Banki.ru and news agency Interfax-CEA, as of January 1, 2009 net assets of Moscow Bank for Reconstruction and Development stood at Rub 118.6 bln (31st place in Russia), while Dalcombank’s net assets amounted to Rub 15.76 bln (132nd place in Russia). Both lending institutions are members of the national deposit insurance system.
