25 Jan 2010 12:27

Fitch Upgrades BPS-Bank to

MOSCOW. Jan 25 (Interfax) - Fitch Ratings increased its grade of Belarus-based BPS Bank's Long-term foreign currency Issuer Default Rating to 'B' from 'B-' and Support Rating to '4' from '5', thereby resolving the Rating Watch Positive (RWP) on the ratings, the agency said in a statement.

The statement said: "A Negative Outlook has been assigned. The rating action follows the completion of the acquisition of a 93.3% stake in BPS by Sberbank - Savings Bank of the Russian Federation (Sberbank; 'BBB'/Negative) from the Belarusian authorities. A full list of rating actions is provided at the end of this comment."

The statement said: "The upgrades reflect the greater potential for the new shareholder, relative to the Belarusian authorities, to provide support to BPS in case of need. At the same time, the ratings are constrained by Belarusian transfer and convertibility risks, which may limit the extent to which Belarusian banks can receive and utilise external support in order to meet obligations to creditors. The Negative Outlook on BPS's IDR reflects the risk that Belarus's economic environment and external finances could deteriorate further, leading to a weakening in the sovereign's credit profile and an increase in transfer and convertibility risks."

The statement included a full list of rating actions:

-Long-term foreign currency IDR: upgraded to 'B' from 'B-', off RWP, Negative Outlook assigned

-Short-term foreign currency IDR: affirmed at 'B' -Support rating: upgraded to '4' from '5'; off RWP

-Individual rating: affirmed at 'D/E'

-Support Rating Floor: affirmed at 'B-' and withdrawn