Fitch upgrades Asian-Pacific Bank

Fitch Ratings said it upgraded PJSC Asian-Pacific Bank's long-term local- and foreign-currency issuer default ratings to B- from CCC and removed them from Rating Watch positive.

The outlook is stable.

Fitch also said it upgraded the bank's viability rating to B- from F.

The actions follow the completion of recent recapitalization measures undertaken by the Central Bank of Russia, which is the current 99.9% owner of the bank, Fitch explained.

The viability rating upgrade follows its downgrade to F in May 2017 after the failure of its subsidiary, M2M Private Bank, which had its license withdrawn in December 2016, the agency said.

The bank's asset quality remains vulnerable with impaired loans of 41% of the end of the first six months of 2018, Fitch said.

Although retail loans are reasonably reserved, the agency said it expects that the unreserved portion of impaired corporate loans would require additional provisioning, the agency said.

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