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Fitch Will Not Lower the Ratings Of Russian Banks
February 14, 2016 16:41


Fitch international rating agency does not intend to lower the ratings of Russian banks after the introduction of the bail-in mechanism - the salvation of banks with the use of the creditors’ funds. This is reported by Rambler News Service.

This measure reduces the possibility of providing state support to troubled banks, however, the Agency considers it to be right. “We believe that the movement towards bail-in demonstrates the willingness of the government to stop using public money on support of banks with poor management quality. It should also standardize the procedure for resolving situations with troubled banks” - Fitch analysts note in their review of the Russian banking sector.

As the experts point out, the ratings of Russian private banks often range between BB + and B- and are due to their self-solvency. The rankings of the largest state-owned banks - Rosselkhozbank and Gazprombank - take into account the factor of state support, but their decline due to the introduction of the bail-in mechanism is also doubtful.

“Legislation of the bail-in will not necessarily lead to the decrease of the ratings of these issuers. We believe that, perhaps, given the factor of ownership, the role of banks in the policies implemented (Rosselkhozbank) and the strong corporate shareholder (Gazprombank), they can still be given support if necessary” – Fitch analysts emphasize.


Author: Anna Dorozhkina

Tags: Fitch Russian banks    

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