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Fitch acts on 4 Russian lenders

Fitch Ratings on May 18 took various actions on four Russian lenders that are indirectly owned by the government.

The rating agency affirmed the long-term foreign- and local-currency issuer default ratings of Interregional Bank for Settlements of the Telecommunications & Postal Services — also known as Sviaz-Bank — and Globex Commercial Bank JSC at BB-, and revised the outlook on the ratings to stable from negative. Their support ratings were also affirmed at 3.

The outlook revision reflects the reduced likelihood that Sviaz-Bank and Globexbank will be sold in the near term following a recent decision by the supervisory board of parent company Vnesheconombank to first merge the lenders under the Sviaz-Bank brand before selling the merged entity in three to four years after it has formed an effective business model.

Fitch also affirmed the long-term foreign- and local-currency issuer default ratings of Bank Rossiysky Capital (PJSC) at BB-, removed them from Rating Watch Negative and assigned a positive outlook on the ratings. Its support rating was affirmed at 3 and removed from Rating Watch Negative, while its support rating floor was revised to No Floor from BB- and was also removed from Rating Watch Negative.

The actions on Bank Rossiysky Capital reflect the transfer of its ownership from the Depository Insurance Agency to joint-stock company DOM.RF Russia Housing and Urban Development Corp., previously known as the state Agency for Housing Mortgage Lending.

In addition, Fitch affirmed the long-term foreign- and local-currency issuer default ratings of Eurofinance Mosnarbank at B+, with stable outlooks. Its support rating of 5 and support rating floor of No Floor were also affirmed.

The four lenders' short-term foreign-currency issuer default ratings were affirmed at B. The viability rating of Sviaz-Bank was downgraded to "b-" from "b," while those of Globexbank and Eurofinance Mosnarbank were affirmed at "b-" and "b+," respectively.