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Fitch upgrades viability rating of Russia's MTS Bank, affirms other ratings

Fitch Ratings on Feb. 26 upgraded Russia-based PJSC MTS Bank's viability rating to "b" from "b-", citing a recent moderation of asset quality risks and tighter underwriting of newly issued loans.

The agency affirmed the bank's long- and short-term issuer default ratings at B+/B, with a negative outlook on the long-term rating. The bank's support rating of 4 was also affirmed.

The affirmation reflects Fitch's view of potential support for the bank from its majority shareholder, Sistema Public Joint Stock Financial Corp., in case of need. The negative outlook reflects that on Sistema.

In May 2017, MTS Bank deconsolidated unit East-West United Bank and off-loaded it to Sistema. Reduced risks from the former subsidiary were one factor behind the upgrade of the viability rating, Fitch noted.