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Fitch Upgrades Alfa-Bank (Russia) to ‘BBB-‘

April 01, 2021. TAG: Financial Services

Fitch Ratings upgraded Alfa-Bank’s Long-Term Issuer Default Ratings (IDRs) to ‘BBB-‘ from ‘BB+’. The Outlooks are Stable. Alfa-Bank is the only Russian privately-owned bank with investment grade rating.

Fitch has upgraded Alfa’s ratings due to a combination of the following factors. First, Fitch revised the outlook on Russia’s operating environment score to Stable from Negative. Second, Alfa’s ratings had already been close to the BBB- level prior to the pandemic as suggested by the Positive Outlook in 2019. Fitch believes that the bank’s stable asset quality metrics and healthy bottom line results in 2020 imply strong execution through the credit cycle and warrant a rating
upgrade. Also, Fitch noted that Alfa is well-positioned to maintain stable asset quality and performance in the next couple of years.

Alfa-Bank’s ratings are driven by its intrinsic credit strength. The Bank continues to capture its strong domestic franchise, a record of strong performance and resilient asset quality, and reasonable liquidity and capital buffers. Fitch believes that Alfa’s corporate loans (71% of the total portfolio) are of resilient credit quality, as the largest of these are extended to leading Russian companies, most of which have international credit ratings of BB and above. Fitch noted that Alfa’s corporate loan quality should stay strong in the next few years.

“Fitch’s high rating is another confirmation that Alfa-Bank coped well with the challenges of 2020 and came out stronger than before. We are the first Russian privately-owned bank that has received an investment grade rating after change in the geopolitical context in 2014. And this is no coincidence. In the context of the coronavirus crisis, thanks to our flexibility and creativity, we were able to quickly rebuild our work, launched several creative anti-crisis solutions and as a result demonstrated great increase of our active retail and SME customers”, said Alexei Tchoukhlov, Deputy Chairman of the Executive Board, Chief Financial Officer.

Fitch also upgraded the Long-Term IDR of Alfa-Bank’s holding company, ABH Financial Limited, to ‘BB+’ from ‘BB’. All debt ratings of Alfa-Bank and ABH Financial were upgraded by one notch.

Alfa-Bank (Russia)

ABH Holdings S.A. (ABHH) is a privately owned Luxembourg-based investment holding company investing into several banking groups in the CIS and Europe. ABHH includes Alfa-Bank (Russia), Alfa-Bank (Ukraine), Alfa-Bank (Belarus), Alfa-Bank (Kazakhstan) and Amsterdam Trade Bank N.V.

Alfa-Bank (Russia), founded in 1990, has developed rapidly to become one of Russia's leading privately owned banks. It provides a full range of banking services — corporate banking, retail banking, investment banking, asset management and trade finance.

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