Fitch Assigns AK BARS Bank's RUB5bn Bonds 'A+(rus)(EXP)' Rating

Wed Mar 20, 2013 10:32am EDT

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(The following statement was released by the rating agency) LONDON/MOSCOW, March 20 (Fitch) Fitch Ratings has assigned AK BARS Bank's (AB) RUB5bn issue of BO-2 senior unsecured bonds with a final maturity in March 2016, an expected National Long-term rating of 'A+(rus)(EXP)'. AB has a Long-term foreign currency Issuer Default Rating (IDR) of 'BB-' with a Negative Outlook, a National Long-term Rating of 'A+(rus)' with a Negative Outlook, a Short-term foreign currency IDR of 'B', a Viability Rating of 'b', and a Support Rating of '3'. KEY RATING DRIVERS The issue's rating corresponds to AB's National Long-term Rating ('A+(rus)'/Stable). RATING SENSITIVITIES AB's National Long-term Rating reflects the moderate probability of support from the Republic of Tatarstan (RT; 'BBB-'/Stable). At the same time Fitch has some concerns, reflected in the Negative Outlook on the bank's IDR, about (i) the limited scope of recapitalisation measures so far, and (ii) the reduced financial flexibility of the RT government. The National Rating and consequently the issue's rating may be downgraded if the bank suffers further losses from its high credit and market risks without its loss-absorbing capital being strengthened by RT. Although not expected by Fitch, any substantial change in ownership and/or governance structure leading to dilution of RT's control could also lead to a downgrade. Changes in RT's ratings may also cause a corresponding change in AB's Long-term and issue ratings, although this would be less likely if RT was upgraded. For more information on the bank's ratings/drivers see 'Fitch Downgrades Ak Bars Bank to 'BB-'; Negative Outlook' dated 7 June 2012 at www.fitchratings.com. Contact Primary Analyst Dmitri Vasiliev Associate Director +7 495 956 9901 Fitch Ratings Moscow Valovaya Str, 26 Moscow Secondary Analyst Anna Erachina Analyst +7 495 956 9901 Committee Chairperson James Watson Managing Director +7 495 956 9901 Media Relations: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email: julia.belskayavontell@fitchratings.com; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 15 August 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research Global Financial Institutions Rating Criteria here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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