PRIME-TASS. International rating agency Fitch has bestowed a long-term foreign currency issuer default rating (IDR) of BBB+ on Swedbank, with a negative outlook, the agency said in a press release.
In addition, Swedbank received the following ratings: short-term foreign currency IDR of F2; long-term national scale rating of ААА (rus), stable outlook; D/E individual rating and support rating of 2.
The long-term IDR reflects support that Swedbank will likely obtain if required from its majority shareholder, Swedbank AB (SAB). The individual rating is maintained by the highly concentrated credit portfolio with regard to the real estate sector and individual borrowers, the weak ability to absorb loan losses in the difficult operating environment and also high reliance on the parent structure’s funding. At the same time, the rating takes into account the lender’s moderate resource base, the low market risk and the sufficient level of integration with SAB activities.
Swedbank’s long-term IDR is maintained by the Russian Federation’s country ceiling at BBB+ and will be revised downward if the sovereign rating is lowered. The individual rating is under substantial pressure from the quality of assets that could lead to a negative rating action if bad debts become high compared to reserves under loan devaluation and capital cushion.
Swedbank is 85% owned by SAB and has a common brand with its parent company, while the remaining 15% stake is in the hands of the European Bank for Reconstruction and Development. At the end of 2008 the lending institution ranked 53rd among Russian banks in terms of assets, with a major focus on corporate lending, and operated nine branches and sales offices in four cities.
