Fitch upgrades Home Credit, Tinkoff Credit banks

Fitch Ratings said it upgraded the long-term issuer default ratings of Home Credit & Finance Bank to BB from BB- and Tinkoff Credit Systems to B+ from B.

The outlook on both banks is stable.

Fitch said it views positively the generally strong financial metrics of the banks, reflected in high lending margins, resulting in usually strong internal capital generation and considerable capacity to absorb losses through the income statement.

The ratings are based on the potentially high cyclicality of the banks' performance, resulting from exposure to one of the riskiest lending segments in a highly cyclical economy, the agency said.

The upgraded ratings include Home Credit's long-term foreign- and local-currency issuer default ratings to BB from BB-, viability rating to BB from BB-, senior unsecured long-term debt ratings to BB from BB- and subordinated debt ratings to BB- from B+.

Tinkoff's long-term foreign- and local-currency issuer default ratings were upgraded to B+ from B, national long-term rating to A(rus) from BBB+(rus), viability rating to B+ from B, senior unsecured long-term debt rating to B+ from B with a recovery rating of RR4, senior unsecured national long-term debt rating to A(rus) from BBB+(rus).

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