Fitch lowers some Russian banks' individual ratings

Fitch Ratings said it affirmed the BBB+ long-term issuer default ratings of Absolut Bank, Rosbank OJSC and ZAO Raiffeisenbank with a negative outlook and downgraded the individual ratings of Rosbank and Raiffeisenbank to D from C/D and the individual rating of Absolut Bank to D/E from D.

The downgrade of the individual ratings reflects ongoing and likely future asset quality deterioration at the banks in the currently difficult Russian operating environment, the agency said.

Fitch said the downgrades also take into account the relatively tight capital positions under which parent banks are operating their subsidiaries and therefore the subsidiary banks' limited ability to absorb loan losses without requiring recapitalization from their owners.

The affirmation of the banks' long-term issuer default ratings reflects Fitch's view that the probability of the banks receiving support, in case of need, remains high due to the still strong ability and willingness of their owners to provide assistance.

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