* S&P raises rating on Cyprus by one notch, to 'B'
* Fitch revises outlook to "stable" from "negative"
* No change to bond market timetable - finance minister
* Any new Russia sanctions could temper Cyprus outlook (Adds finance minister, Russia impact, changes dateline)
NICOSIA, April 25 Credit agency Standard and Poor's raised its rating on Cyprus to "B" from "B-" on Friday, saying the Mediterranean nation was faring better than expected after last year's tumultuous international bailout.
Cyprus was meeting terms set out by its foreign lenders and risks to its debt repayments were less, the ratings agency said.
It was Standard and Poor's second upgrade of Cyprus since it came to the brink of financial collapse in March 2013, with a banking system crippled by its exposure to debt-laden Greece and no access to international capital markets. It last upgraded Cyprus six months ago.
The upgrade did not alter Cyprus's timetable on returning to financial markets, anticipated towards the end of 2015, the Cypriot finance minister said.
"Despite the continued recession ... prospects are somewhat brighter than we had anticipated in our last review in November 2013," Standard and Poor's said.
The country had outperformed borrowers' expectations with a shallower recession than anticipated and better fiscal performance, likely to be repeated this year, it said.
The agency however said that the possibility of tighter EU sanctions on Russia, a close business partner and a major source of tourists, could temper the outlook. Standard and Poor's cut Russia's credit rating on Friday.
Cyprus, an EU member state, has already stated publicly it disagrees with further sanctions on Russia.
Standard and Poor's said it might raise Cyprus' rating again within the next 12 months if it continued to comply with the measures outlined in a bailout plan agreed with the EU and the International Monetary Fund (IMF).
Separately, Fitch ratings revised its outlook on Cyprus to stable from negative on Friday, citing better-than-expected economic performance and progress in reform implementation.
Fitch rates Cyprus B-, and Moody's Investors' Service at Caa3.
"We will remain down to earth and are continuing our efforts with confidence," Cypriot Finance Minister Harris Georgiades wrote on his Facebook account.
Just a year ago, Cyprus, one of the smallest countries in the euro zone, became the first nation in the history of the euro zone to impose capital controls to prevent the collapse of its banking system.
Cyprus signed up to a 10 billion euro ($14 billion) bailout programme with the EU and the IMF, on condition that it shut a major bank and recapitalised a second lender with its clients' deposits.
Cyprus may even test international markets earlier than anticipated to gauge appetite for Cypriot debt, Cypriot President Nicos Anastasiades told Reuters this month.
Asked if the upgrades were conducive to Cyprus returning to international markets earlier than envisaged in late 2015, Georgiades told Reuters there was "no change" in their plans. (Reporting by Renee Maltezou and Michele Kambas; Editing by Louise Ireland)