Fitch Ratings on Sept. 4 upgraded JSC Bank DOM.RF's long-term foreign- and local-currency issuer default and senior unsecured debt ratings to BB from BB- and maintained the ratings on Rating Watch Positive.
At the same time, Fitch revised the Russian lender's support rating floor to BB from No Floor and subsequently withdrew the rating as it no longer considered it to be relevant to its coverage.
Bank Dom.RF's short-term issuer default rating and support rating were affirmed at B and 3, respectively.
The upgrade of the bank's ratings follows a similar rating action on its parent company, JSC DOM.RF Russia Housing & Urban Development Corp. The agency noted that Bank Dom.RF's ratings are driven mainly by institutional support from the parent, while the long-term issuer default ratings reflect the unit's limited record of operations under Dom.RF Corp., its ongoing financial rehabilitation and the parent company's limited ability to provide support without government assistance.
The withdrawal of the lender's support rating floor is based on Fitch's approach to rating the bank based on institutional support instead of sovereign support.
The retention of Bank Dom.RF's ratings on Rating Watch Positive reflects the agency's expectation that the common equity injection of 55 billion Russian rubles to the firm, which is 32% of its risk-weighted assets, will be enough to provide for its legacy risks and complete its rehabilitation plan by the end of the first quarter of 2020.
As of Sept. 4, US$1 was equivalent to 66.15 Russian rubles.
