Fitch affirms Vneshtorgbank

Fitch Ratings said it affirmed the ratings of Russia's Vneshtorgbank (VTB) at long-term BB+ with stable outlook, short-term B, individual C/D, support 3.

The rating action follows clarification received by Fitch on the background and terms of VTB's recent acquisition of Guta Bank. VTB announced earlier this week that it has acquired an 86% stake in Guta Bank, one of Russia's 25 largest banks, for the symbolic sum of RUB1 million.

Earlier this month, Guta Bank became the highest profile casualty of Russia's recent mini-crisis, having suffered a sharp deterioration in its liquidity position. In support of the deal, the Central Bank of Russia has placed a $700 million deposit with VTB for one year (with a one-year extension option) at LIBOR. Part of this deposit will be used to inject liquidity into Guta Bank to enable it to open for business again.

Fitch said that based on the information it has received to date about Guta Bank, the acquisition, in itself, does not affect VTB's individual rating. VTB has yet to complete its review of Guta Bank's balance sheet, but its assets on acquisition are anticipated to total less than $900 million (under Russian Accounting Regulation).

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