Fitch affirms rating for VEB, Sberbank, VTB, RSHB at BBB with stable outlook
LONDON. Jan 18 (Interfax) - Fitch Ratings has affirmed its long-term issuer default rating (IDR) for Sberbank , Vnesheconombank (VEB), VTB and Rosselkhozbank (RSHB) at BBB with a stable outlook, the agency said in a press release.
Fitch also changed its long-term IDR outlook for six banks - Raiffeisenbank, Citibank, Rosbank , Nordea Bank, Danske Bank and Seb Bank - to stable from positive, with a rating of BBB+.
"The rating actions follow Fitch's revision of the Russian Federation's Outlook to Stable from Positive and the affirmation of its Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BBB' on 16 January 2012," the release says.
"The revision of the Outlooks on the Long-term IDRs of CJSC Raiffeisenbank, CJSC Citibank, Rosbank, OJSC Nordea Bank, CJSC Danske Bank and SEB Bank JSC, which are all rated 'BBB+', reflects the reduced likelihood of an upgrade of Russia's Country Ceiling of 'BBB+' following the change in the sovereign Outlook. Russia's Country Ceiling captures transfer and convertibility risks and limits the extent to which support from the foreign shareholders of these banks can be factored into their Long-term foreign currency IDRs. The banks' Long-term local currency IDRs, where assigned, also take account of Russian country risks.
"CJSC Raiffeisenbank is a 100%-subsidiary of Raiffeisen Bank International AG ('A'/Stable), CJSC Citibank is 100%-owned by Citigroup Inc. ('A'/Stable), Rosbank is 82.4%-owned by France's Societe Generale ('A+'/Negative), Nordea Bank is 100%-owned by Nordea Bank AB ('AA-'/Stable), CJSC Danske Bank is 100%-owned by Danske Bank A/S ('A'/Negative) and SEB Bank JSC is 100%-owned by Skandinaviska Enskilda Banken AB ('A+'/Stable). The Long- and Short-term IDRs and Support Ratings of these six banks reflects the high probability of support that would likely be forthcoming from their majority shareholders, in case of need.
"The Long-term IDRs of Sberbank, VEB, VTB and RusAg are affirmed at the same level as the Long-term IDR of the Russian Federation, at 'BBB'. The ratings of all four banks continue to be underpinned by Fitch's view of the high probability of support from the Russian authorities, in case of need, given their majority state ownership; close association between the government and the four banks, based on supportive policy statements and strong board representation; the systemic importance of the commercial banks and VEB's development bank status; and the track record of providing both new equity and subordinated debt to the banks during the recent crisis. At the same time, Fitch also considers Sberbank's standalone credit profile, as reflected in its Viability Rating of 'bbb', merits a 'BBB' Long-term IDR, i.e. without taking into account the benefits of potential support," Fitch said.
"The Russian state owns 60% of Sberbank's ordinary shares and 75.5% of VTB. RusAg is fully state-owned, while VEB is a state corporation established by the Russian Federation. The government has announced its intention to reduce its stakes in VTB, Sberbank and RusAg in the medium term, under some scenarios below 50% after 2013. If this materialises, Fitch may moderately revise downwards its assessment of the probability of support for the affected institutions. Nevertheless, a high probability of government support would likely still be factored into the banks' ratings given their systemic importance, and the fact that the authorities would probably still remain the largest single shareholder in each case and retain a close association with the banks.
"As Fitch has previously stated, if the Russian Federation's Long-term IDRs are upgraded to 'BBB+' - notwithstanding the recent revision of the Outlook to Stable - the Support Rating Floors, and hence also Long-term IDRs, of Sberbank, VEB, VTB and RusAg would probably be affirmed at 'BBB'. This reflects Fitch's usual practice of notching the ratings of state-owned banks down from their respective sovereigns at higher rating levels. It also reflects the agency's view that if there was a deep financial crisis in Russia, there is some risk that the sovereign would cease to provide full and timely support to state-owned banks and other quasi-sovereigns, including to allow them to make all payments to bondholders, before it defaulted on its own obligations," the agency said.
The rating actions are as follows:
CJSC Raiffeisenbank
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
Long-term local currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB+'
Viability Rating: 'bb+'; unaffected
Individual Rating: 'C/D'; unaffected
CJSC Citibank
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Viability Rating: 'bb+'; unaffected
Individual Rating: 'C/D'; unaffected
Rosbank
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
Long-term local currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB+'
Viability Rating: 'bb-'; Rating Watch Positive; unaffected
Individual Rating: 'D'; Rating Watch Positive; unaffected
OJSC Nordea Bank
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Individual Rating: 'D'; unaffected
CJSC Danske Bank
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
SEB Bank JSC
Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook revised to Stable from Positive
Short-term foreign currency IDR: affirmed at 'F2'
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Sberbank - Savings Bank of the Russian Federation
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB'
Senior unsecured debt: affirmed at 'BBB'
Subordinated debt: affirmed at 'BBB-'
Viability Rating: 'bbb'; unaffected
Individual Rating: 'C'; unaffected
Sberbank Leasing
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Vnesheconombank
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB'
Senior unsecured debt: affirmed at 'BBB'
OJSC VEB-Leasing
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB'
Bank VTB (JSC)
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB'
Senior unsecured debt: affirmed at 'BBB'
Viability Rating: 'bb'; unaffected
Individual Rating: 'C/D'; unaffected
CJSC Bank VTB24
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB'
Viability Rating: 'bb'; unaffected
Individual Rating: 'C/D'; unaffected
VTB Leasing
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB'
VTB Capital plc
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Individual Rating: 'D'; unaffected
Senior unsecured debt: affirmed at 'BBB'
VTB Bank (Austria) AG
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Individual Rating: 'D'; unaffected
Russian Agricultural Bank
Long-term foreign currency IDR: affirmed at 'BBB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook Stable
National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB'
Senior unsecured debt: affirmed at 'BBB'
Subordinated debt: affirmed at 'BBB-'
Viability Rating: 'b+'; unaffected
Individual Rating: 'D'; unaffected