Fitch affirms Locko-bank

Fitch Ratings said it affirmed Locko-bank's long-term foreign- and local-currency issuer default ratings and short-term foreign-currency issuer default rating at B, its senior unsecured debt at B with a recovery rating of RR4, its individual rating at D, its support rating at 5, its support rating floor at "No Floor" and its national long-term rating at BBB-(rus).

The outlook remains negative.

The agency said Locko's ratings reflect certain weaknesses and negative trends in the bank's credit profile. In particular, the bank's tight wholesale debt repayment schedule has reduced financial flexibility, causing significant loan portfolio reduction and giving rise to greater pressure on liquidity, Fitch said.

However, Fitch believes that Locko has, to date, been able to maintain liquidity, asset quality and capital metrics that are still consistent with the B rating level.

The negative outlook continues to reflect the still-significant potential for further asset quality deterioration in the currently difficult operating environment, the agency said, in particular due to the higher-risk profile of some of the bank's exposures.

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