Fitch Ratings on Jan. 27 upgraded PAO Bank Zenit's long-term foreign- and local-currency issuer default ratings and senior unsecured debt rating to BB from BB- and removed them from Rating Watch Positive.
The outlook on the long-term issuer default ratings is stable. Fitch downgraded Bank Zenit's viability rating to "b+" from "bb-" and affirmed its B short-term foreign-currency issuer default rating.
Fitch upgraded the bank's national long-term rating and national long-term senior unsecured debt rating to AA(rus) from A+(rus), removed the ratings from Rating Watch Positive and withdrew them. The agency also upgraded the support rating to 3 from 5 and removed it from Rating Watch Positive, while withdrawing the support rating floor, which was affirmed at No Floor.
The upgrade of the issuer default ratings, national ratings and support rating follows the increase of Russian oil firm PJSC Tatneft's ownership in the bank to 50.4% from 49% and Fitch's expectation that the stake will further increase due to the bank's 14 billion Russian rubles capital increase. The capital increase will include the conversion into equity of 9 billion rubles in subordinated loans provided by Tatneft.
The downgrade of the bank's viability rating reflects its weakened and still vulnerable asset quality, continued poor performance and only moderate capital cushion. The stable outlook on the bank's issuer default ratings reflects that on Tatneft and Russia.
As of Jan. 27, US$1 was equivalent to 59.60 Russian rubles.