Fitch keeps Probusinessbank on watch

Fitch Ratings said Probusinessbank's ratings remain on Rating Watch negative, including its B- long-term foreign- and local-currency issuer default ratings, B short-term foreign-currency issuer default rating, B-/RR4 senior unsecured debt rating, D/E individual rating, 5 support rating, "No Floor" support rating floor and BB-(rus) national long-term rating.

The agency said Probusinessbank's non-performing loans rose to a reported 13.3% on a consolidated basis at the end of the third quarter. Impairment reserve coverage of reported non-performing loans was around 100%, but Fitch said the bank's loss-absorption capacity is limited given that its standalone regulatory capital adequacy ratio was 10.7% at the end of the quarter, only marginally above the minimum 10% level.

A consolidated capital ratio of 15.6% suggests slightly more flexibility on a group basis, but the agency believes Probusinessbank will likely require new capital injections given asset quality weakness and its tight standalone ratio.

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