Fitch Ratings withdraws VTB Bank Armenia ratings

PanARMENIAN.Net - Fitch Ratings has affirmed and withdrawn the ratings of VTB Bank Armenia (VTBA), including its Long-term Issuer Default ratings (IDR) at 'BB', cbonds.info reported.

The IDRs of VTBA reflect Fitch's view of the moderate probability of support being forthcoming, if required, from its owner, Russia's JSC VTB Bank (VTB; 'BBB'/Stable/'F3'). This is based on VTB's 100% ownership, the strategic importance of CIS markets for VTB and the small size of VTBA relative to its parent. However, the extent to which this support can be factored into the ratings is limited by Armenian transfer and convertibility risks, as captured in the 'BB' Country Ceiling.

The Individual Rating of 'D/E' reflects the high proportion of foreign currency loans, operational risks associated with its branch network, the still significant dependence on the parent for funding and liquidity support and a difficult, albeit improving, operating environment. However, it also takes into account the bank's solid capitalization, the recent stabilization of asset quality metrics and the significant domestic franchise.

VTBA held 10% of sector loans and 7% of retail deposits at end-Q110. Fitch will no longer provide ratings or analytical coverage of VTBA.