Fitch upgrades Credit Bank of Moscow, Zenit

Fitch Ratings said it upgraded the long-term issuer default ratings of Credit Bank of Moscow to BB from BB- and Bank Zenit to BB- from B+.

The agency also affirmed the long-term IDRs of Promsvyazbank and Bank Saint-Petersburg at BB-.

The outlook on all four banks is stable.

Fitch said the upgrade of Credit Bank of Moscow's ratings reflects the extended track record of better-than-peers asset quality, profitability and capitalization; the reduced concerns about the quality of the bank's capital due to moderation of related party lending and improvement of the quality of the latter; and the broadening of the bank's franchise and client base on both sides of the balance sheet.

At the same time, Credit Bank of Moscow's ratings continue to reflect the weaker than peers funding profile, as reflected by higher funding costs and greater reliance on wholesale debt; the somewhat weaker than peers credit quality of the recently grown retail loan book, although performance is still reasonable on a risk/return basis; and risks related to the bank's rapid loan growth in recent years, although these are offset by the predominantly short-term and fast-amortizing nature of most corporate lending.

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