Fitch affirms GlobexBank, Sviaz-Bank

Fitch Ratings said it affirmed GlobexBank and Sviaz-Bank's long-term foreign-currency issuer default ratings at BB, short-term foreign-currency issuer default ratings at B and national long-term ratings at AA-(rus).

The outlook is stable.

The banks' ratings are driven by the potential support that the banks could receive, in case of need, from their majority shareholder, state-owned Vnesheconombank (BBB/stable), the agency said.

However, Fitch said it maintains a three-notch difference between Vnesheconombank's ratings and the ratings of GlobexBank and Sviaz-Bank, reflecting the fact that the acquisitions of GlobexBank and Sviaz-Bank were driven by the need to rescue banks and Vnesheconombank has also publicly confirmed its intention to sell both banks in the long term, the agency said.

The ratings on Sviaz-Bank consider the risks associated with rapid recent and planned growth, the agency added. The rating also considers poorly diversified funding, mostly sourced from state-controlled corporate entities and subordinated loans from Vnesheconombank.

GlobexBank's ratings reflect risk arising from the bank's rapid growth (69% in 2010), high concentration on both sides of balance sheet, significant exposure to real estate and construction sectors, Fitch said.

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