Fitch Upgrades Russia's Absolut Bank to "A-"

Fitch Ratings has today upgraded Russia’s Absolut Bank’s ("Absolut") ratings to Long-term Issuer Default ("IDR") "A-" (A minus) from "B", Short-term IDR "F2" from "B", Support "1" from "5" and National Long-term "AAA(rus)" from "BBB (rus)". These ratings are removed from Rating Watch Positive ("RWP"). Stable Outlooks are assigned to the Long-term IDR and the National Long-term rating. The Individual rating is affirmed at "D". Fitch has also withdrawn Absolut’s sovereign-derived Support Rating Floor of "No Floor".

These rating actions follow the recent completion of the acquisition of a 95% stake in the bank by Belgium-based KBC Bank (rated "AA-" (AA minus)/Outlook Stable).

The upgrade reflects Fitch’s view of KBC Bank’s greater ability, compared with that of Absolut’ previous majority owners, to provide Absolut with support in case of need. Absolut’s Long-term IDR is now at Russia’s "A-" (A minus) Country Ceiling.

Absolut is now controlled by KBC Bank, while the IFC holds the remaining 5% share. Absolut is rapidly expanding out of its core region in Moscow, and already has a sizable presence in other regions as well. Its main business consists of corporate lending, including trade finance, but the bank is also building up retail banking, including mortgages and car loans.

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