Fitch affirms VTB Bank

Fitch Ratings said it affirmed JSC VTB Bank's long-term foreign-currency issuer default rating at BB-, long-term local-currency issuer default rating at BB, short-term issuer default rating at B, support rating at 3, individual rating at D/E and national long-term rating at AAA (ukr).

The outlook for the long-term foreign-currency and local-currency issuer default ratings is positive. The national long-term rating has a stable outlook.

According to the agency, the issuer default ratings reflect potential support from its majority shareholder JSC Bank VTB (long-term issuer default rating BBB+/stable), the second-largest state-owned bank in Russia, but the long-term foreign-currency issuer default rating is constrained by the country ceiling for Ukraine.

The individual rating considers the bank's rapid growth, modest profitability, growing reliance on its parent's funding and only modest capitalization, given significant borrower concentrations and low loan impairment reserve levels, Fitch said. The individual rating also reflects the bank's growing franchise and limited market risks, the agency said.

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