Fitch reviews six Georgian banks

Fitch Ratings said it has taken several actions on six Georgian banks.

TBC Bank's long-term issuer default rating was upgraded to B+ from B and remains on rating watch negative and its short-term issuer default rating was affirmed at B.

The upgrade reflects changes in the bank's ownership structure during the second quarter of 2009, which resulted in the combined stakes of international financial institutions increasing to 55% from 22%, Fitch said.

Bank of Georgia's long-term foreign- and local-currency issuer default rating was affirmed at B and removed from rating watch negative and assigned a negative outlook, its senior unsecured debt was affirmed at B and removed from rating watch negative with a recovery rating of RR4 and its short-term foreign- and local-currency issuer default ratings was affirmed at B.

The affirmation reflects the bank's standalone financial position, which has been bolstered by capital and funding support from IFIs, the agency said.

ProCredit Bank (Georgia)'s long-term foreign-currency issuer default ratings at B+ and remains on rating watch negative, long-term local-currency issuer default rating at BB- and remains on rating watch negative and its short-term foreign- and local-currency issuer default ratings were affirmed at B.

The affirmation reflects its significantly better asset quality relative to other banks in the sector, with reported loans overdue more than 30 days at 2.3% of total loans at end the first half of 2009, Fitch said.

JSC VTB Bank (Georgia)'s long-term issuer default rating was affirmed at B+ and remains on rating watch negative and its short-term issuer default rating was affirmed at B.

The ratings reflect the bank's weak asset quality and limited loss absorption capacity, even after an equity injection in May 2009 and the prolongation of subordinated debt received from the bank, the agency said.

JSC Basisbank's long-term issuer default rating was affirmed at CCC and its outlook was revised to negative from stable and its short-term issuer default rating was affirmed at C.

The revision of Basisbank's outlook reflects its weak asset quality and insufficient provisioning, Fitch said, and the potential for further asset quality deterioration and reserve creation to reduce the bank's capital.

JSC BTA Bank (Georgia)'s long-term issuer default rating was affirmed at CCC and remains on rating watch negative and its short-term issuer default rating was affirmed at C.

Fitch said it maintained BTA's ratings and negative watch due to its still high dependence on short-term funding from Kazakhstan's BTA Bank and continued uncertainty surrounding its attempts to restructure its external liabilities.

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