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Fitch revises outlook on Russia-based Alfa-Bank's issuer default ratings

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Fitch revises outlook on Russia-based Alfa-Bank's issuer default ratings

Fitch Ratings on Oct. 9 revised the outlook on Russia-based JSC Alfa-Bank's long-term foreign- and local-currency issuer default ratings to positive from stable, while affirming the ratings at BB+.

The positive outlook reflects the agency's base case expectation that Alfa-Bank will be upgraded to BBB- over the next one to two years, in line with improvements in the Russian operating environment and upgrades of other Russian privately owned banks.

Fitch also upgraded the bank's support rating to 3 from 4 and revised its support rating floor to BB- from B. Its B short-term foreign-currency issuer default rating, "bb+" viability rating and BB+ long-term senior unsecured debt rating were affirmed.

Alfa-Bank's ratings reflect the agency's view of its intrinsic credit strength, well-established domestic franchise, and its access to top tier Russian borrowers and depositors. The ratings also factor in Alfa-Bank's asset quality, stable bottom line performance, strong funding profile and sufficient liquidity. On the negative side, the ratings also take into account significant risks related to the bank's planned expansion in unsecured retail lending, the agency noted.

Concurrently, Fitch changed the outlook on the long-term issuer default rating of Alfa-Bank's Cyprus-based parent ABH Financial Ltd. to positive from stable while affirming it at BB. Its short-term issuer default rating was affirmed at B.

The agency also affirmed the long-term senior unsecured debt rating of Ireland-based Alfa Bond Issuance PLC and Alfa Holding Issuance PLC at BB+ and BB, respectively.