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FITCH RATES VTB BANK (ARMENIA) 'BB': OUTLOOK STABLE
Arka News Agency, Armenia
Nov 8 2006
YEREVAN, November 7. /ARKA/. Fitch Ratings has assigned today VTB Bank
(Armenia) ("VTBA") ratings of Issuer Default 'BB', Short-term 'B',
Individual 'D/E' and Support '3'. The Outlook is Stable. The bank's
Issuer Default rating ("IDR") is at Armenia's Country Ceiling.
The Issuer Default, Short-term and Support ratings reflect the
moderate probability of support being forthcoming, if required, from
VTBA's majority shareholder, Russia's Vneshtorgbank. In Fitch's view,
VTB would have a strong propensity to support VTBA, if required,
although the ability of VTBA to receive and utilise this support may
be constrained by Armenian country risks, in particular transfer and
convertibility risks, as reflected in the Country Ceiling.
In light of VTBA's large market share, there is also a limited
probability of support being forthcoming from the Armenian authorities
(rated foreign currency and local currency Issuer Default 'BB-'(BB
minus)), although in Fitch's view the authorities would be more likely
to look for VTB to first support the bank, should the need arise.
The Individual rating reflects VTBA's modest profitability, high
loan concentration, weak loan loss reserves and increased exposure to
structural risk due to maturity mismatches. The rating also takes into
account the bank's significant domestic franchise, sound capitalisation
and adequate liquidity position. VTBA's overall competitive profile
has been enhanced following a restructuring by its new shareholder
with stronger emphasis on the rationalisation of its low-efficiency
large branch network and on diversification of the funding base.
VTBA is Armenia's fourth largest bank, with 10% of the banking
system's loans and retail deposits at end-H106. VTB acquired a 70%
stake in March 2004. VTBA (formerly known as Armsberbank) has a long
history of operations in Armenia and traces its origin to a branch
of Sberbank of the USSR, established in 1923. The bank services both
corporate and retail clients, supported by an extensive branch network
consisting of 100 branches located all over the country.
The VTBA has the fourth largest amount of assets, the 5th largest
amount of crediting of individuals and the 2nd largest amount of
crediting of legal entities. The bank ranks 3rd as to the volume of
fixed deposits attracted from individuals, 2nd as to call deposits
attracted from individuals.
The bank has the fourth largest total capital and the 2nd largest
authorized capital.
Arka News Agency, Armenia
Nov 8 2006
YEREVAN, November 7. /ARKA/. Fitch Ratings has assigned today VTB Bank
(Armenia) ("VTBA") ratings of Issuer Default 'BB', Short-term 'B',
Individual 'D/E' and Support '3'. The Outlook is Stable. The bank's
Issuer Default rating ("IDR") is at Armenia's Country Ceiling.
The Issuer Default, Short-term and Support ratings reflect the
moderate probability of support being forthcoming, if required, from
VTBA's majority shareholder, Russia's Vneshtorgbank. In Fitch's view,
VTB would have a strong propensity to support VTBA, if required,
although the ability of VTBA to receive and utilise this support may
be constrained by Armenian country risks, in particular transfer and
convertibility risks, as reflected in the Country Ceiling.
In light of VTBA's large market share, there is also a limited
probability of support being forthcoming from the Armenian authorities
(rated foreign currency and local currency Issuer Default 'BB-'(BB
minus)), although in Fitch's view the authorities would be more likely
to look for VTB to first support the bank, should the need arise.
The Individual rating reflects VTBA's modest profitability, high
loan concentration, weak loan loss reserves and increased exposure to
structural risk due to maturity mismatches. The rating also takes into
account the bank's significant domestic franchise, sound capitalisation
and adequate liquidity position. VTBA's overall competitive profile
has been enhanced following a restructuring by its new shareholder
with stronger emphasis on the rationalisation of its low-efficiency
large branch network and on diversification of the funding base.
VTBA is Armenia's fourth largest bank, with 10% of the banking
system's loans and retail deposits at end-H106. VTB acquired a 70%
stake in March 2004. VTBA (formerly known as Armsberbank) has a long
history of operations in Armenia and traces its origin to a branch
of Sberbank of the USSR, established in 1923. The bank services both
corporate and retail clients, supported by an extensive branch network
consisting of 100 branches located all over the country.
The VTBA has the fourth largest amount of assets, the 5th largest
amount of crediting of individuals and the 2nd largest amount of
crediting of legal entities. The bank ranks 3rd as to the volume of
fixed deposits attracted from individuals, 2nd as to call deposits
attracted from individuals.
The bank has the fourth largest total capital and the 2nd largest
authorized capital.