Fitch Ratings on Aug. 20 upgraded the long- and short-term issuer default ratings of Sberbank (Switzerland) AG
The outlooks on the long-term ratings were revised to stable from positive.
The agency also upgraded Sberbank Europe's viability rating to bb- from b+ and its support rating to 2 from 3. The Swiss entity's support rating, meanwhile, was affirmed at 2.
The upgrades follow a similar action on their parent, PAO Sberbank of Russia. The issuer default and support ratings reflect Fitch's view that Sberbank (Switzerland) and Sberbank Europe are highly likely to receive support from their Russian parent if needed, given the high reputational risks for Sberbank of Russia from any default of the subsidiaries due to its presence in international markets. The ratings also take into account the units' small size relative to the parent.
Furthermore, the upgrade of Sberbank Europe's viability rating reflects improvements in its asset quality metrics, its stable capitalization, its decreased dependence on wholesale funding and the tentative recovery of its earnings, Fitch noted.
