The international rating agency Fitch Ratings has affirmed Alfa Bank's long-term issuer default rating (IDR) at BB +, as well as the rating of its Cypriot holding company ABH Financial Limited (ABHFL) at BB. According to the agency's press release, the rating forecast was changed to “stable” from “negative”.
The bank's short-term IDR was affirmed at 'B', support rating at '3', VR at 'bb +', senior unsecured debt at 'BB +'.
“The revision of the Outlook for the Long-term IDR reflects the weakening of the pressure on the credit profile of Alfa-Bank, caused by the pandemic, the fall in oil prices and, as a result, the economic downturn in Russia,” – the message says.
Agency analysts point out that the bank's profitability remains good. In their opinion, this will allow Alfa-Bank to cover credit losses even in the event of a longer and more serious recession than is currently expected.
Alfa Bank's rating could be upgraded to BBB- if the Russian economy stabilizes in line with Fitch's baseline scenario and the bank's credit losses from the downturn and expansion into the retail sector remain manageable.
If the situation in the economy turns out to be worse than forecasted or the bank fixes more significant losses, its ratings are more likely to remain at current levels than to be downgraded, the report said.
According to the results of the second quarter of 2020, Alfa-Bank ranked 4th in terms of assets in the Interfax-100 ranking prepared by Interfax-CEA.