Fitch lifts Bank Zenit

Fitch Ratings said it upgraded Bank Zenit's long-term issuer default ratings to BB from BB- and removed it from Rating Watch positive.

The outlook is stable.

The agency also said it downgraded the bank’s viability rating to B+ from BB-.

The upgrades follow the increase of the ownership stake in the bank by oil company PJSC Tatneft to 50.4% from 49%, along with an expectation that the stake will further increase as a result of an announced RUB 14 billion equity injection in the first half of 2017, Fitch said.

As a majority shareholder who will consolidate the bank in its financial accounts, Tatneft will now have a higher propensity to support the bank, the agency said.

Fitch said it has not factored in support from Tatneft directly into the bank’s ratings, although the bank's credit profile has benefitted from significant liquidity placements and capital injections from the company.

The two-notch difference between Tatneft's and the bank’s issuer default ratings reflect a view that the bank is a non-core asset for the company with limited synergies between the two entities, the agency said.

Tatneft's BBB- long-term issuer default rating is capped by Russia's sovereign rating, Fitch added.

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