Fitch Ratings has affirmed Short-Term Foreign Currency IDR and Senior unsecured debt short-term rating at ’B’ placing AK BARS Bank’s support-driven ratings on Ratings Watch.
According to Fitch Ratings «under-watch» placement is mainly driven by the default of Tatfondbank (TFB) last week, another Tatarstan-based bank, a possible reduction in the ability of the Republic of Tatarstan to support AK BARS in case RT using resources to (partially) resolve problems at TFB.
Fitch Ratings also notes the Comfortable liquidity level as well as the reduction in risky assets by RUB 35 bln. during 2nd and the 3rd quarters 2016.
The assessment, according to Fitch, also takes into account the Republic of Tatarstan (RT) majority ownership in the Bank, close relationship with regional administration, the Bank’s systemic importance in the region (with about 40% market share).
The Bank is expecting to improve the Tier 1 capital ratio to 10,5% by the end 2Q-2017, in particular as result of a RUB10bn equity injection from RT.
Zufar Garaev, the Chairman of the Management Board, commented on the rating assessment: «With regard to AK BARS Bank, the real situation within all areas of the Bank’s business is stable. The Bank has a strong liquidity position and decent capital adequacy ratio — the liquidity ratio is 8 times exceeding the required standards, capital of AK BARS Bank increased by 16% for the current year. The capital increase is on the agenda of the Bank’s Board of Directors to be held on 21 December 2016. The Bank has determined its development trajectory for the next few years possessing all the resources to achieve its goals, including full support of all shareholders».