Fitch affirms Alfa Bank (Ukraine)'s IDR At B-.

By bne IntelliNews August 14, 2012
Fitch Ratings, has affirmed Alfa Bank (Ukraine) Long-term Issuer Default Rating (IDR) at B- with a Stable Outlook and Viability Rating (VR) at ccc, the agency has announced. The agency based its decision on potential support the bank may receive from other assets controlled by its main shareholders, including from its sister bank, Russia-based Alfa-Bank, which also holds a minority 19.9% stake in Alfa Bank (Ukraine). The support considerations factor in the shareholders' intention to broaden the banking franchise in Ukraine, the track record of capital injections, albeit on a limited scale, and the common brand and board members with Alfa Bank. Alfa Bank (Ukraine)'s VR reflects the bank's quite modest capitalisation and high dependence on timely capital support from its parent, which is similar to other rated foreign-owned Ukrainian banks. Profit generation is low due to the still difficult operating environment, although Alfa Bank (Ukraine) has managed to improve its margins from retail lending growth and repayment of expensive Eurobond funding. As of Jul 1, Alfa Bank (Ukraine)'s assets amounted to UAH 27.9bn, credits and clients' liabilities stood at UAH 17.9bn, and shareholders' equity at UAH 4.1bn. The bank posted net profit of UAH 25.5mn for H1. ABH Ukraine Limited (Cyprus), part of the Alfa Group consortium, owns 80.1% of the shares in Alfa Bank (Ukraine) and Alfa Bank (Russia) owns 19.9%.

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