Fitch Ratings-London/Moscow-9 October 2008: Fitch Ratings has today affirmed the ratings of Russia's Dalcombank (DCB) at long-term Issuer Default Rating (IDR) 'B+', short-term IDR 'B', Individual 'E', Support '4', National long-term 'A-(A minus)(rus)'. The Rating Outlooks for the long-term IDR and National long-term rating are Stable.
The rating action follows the approximate 10% outflow of retail funding during the 8th and 9th of October 2008. DCB’s liquid assets have been sufficient to meet these withdrawals to date. In addition, Fitch has been informed that the affiliated Moscow Bank for Reconstruction and Development (MBRD, long-term IDR ‘B+’) has today made additional liquidity available to DCB through currency swaps and deposits. Fitch has also today received renewed assurances from the major shareholder of DCB, Sistema JSFC (Sistema, rated ‘BB-’ (BB minus/Stable Outlook), of its intention to support the bank in case of need.
DCB’s IDRs, National and Support rating reflect the potential support from Sistema. Its Individual rating reflects its undercapitalisation, high concentration risk and the poor quality of the loan book. The rating also considers the fact that DCB’s liquidity position is potentially vulnerable on a stand-alone basis (i.e. without taking account of potential external support), with 90% of liabilities coming from mostly short-term customer funds, and approximately 70% of these from retail clients.
DCB is a small bank based in Khabarovsk in the far east of Russia with a broad presence in other neighbouring regions. The bank is engaged in both corporate and retail lending. The bank is more than 98%-owned by Sistema, which also holds a 91% stake in MBRD. |
