Fitch cuts Novikombank to B-

Fitch Ratings said it downgraded Novikombank's long-term foreign-currency issuer default rating to B- from B and placed the bank on Rating Watch Negative (RWN).

Fitch said the downgrade reflects significantly increased asset quality problems and a lack of adequate capital support from the majority shareholder, Russian Technologies State Corp., to address these. The bank is currently reliant on regulatory forbearance for only gradual provisioning of certain risk exposures to avoid breaching minimal capital ratios, while planned moderate shareholder capital contributions are insufficient to bring the bank back into compliance on a sustained basis.

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