Yerevan, November 8 /Mediamax/. The international Fitch Ratings Agency has assigned VTB-Armenia Bank (VTBA) ratings of Issuer Default ’BB’, Short-term ’B’, Individual ’D/E’ and Support ’3’.

Mediamax reports that the Outlook is Stable. The bank’s Issuer Default rating (IDR) is at Armenia’s Country Ceiling.

According to Fitch Ratings, Short-term and Support ratings reflect the moderate probability of support being forthcoming, if required, from VTBA’s majority shareholder, Russia’s Vneshtorgbank (VTB, IDR ’BBB+’). In Fitch’s view, VTB would have a strong propensity to support VTBA, if required, although the ability of VTBA to receive and utilize this support may be constrained by Armenian country risks, in particular transfer and convertibility risks, as reflected in the Country Ceiling. In light of VTBA’s large market share, there is also a limited probability of support being forthcoming from the Armenian authorities (rated foreign currency and local currency Issuer Default ’BB-’(BB minus)), although in Fitch’s view the authorities would be more likely to look for VTB to first support the bank, should the need arise.

The Individual rating reflects VTBA’s modest profitability, high loan concentration, weak loan loss reserves and increased exposure to structural risk due to maturity mismatches. The rating also takes into account the bank’s significant domestic franchise, sound capitalization and adequate liquidity position. VTBA’s overall competitive profile has been enhanced following a restructuring by its new shareholder with stronger emphasis on the rationalization of its low-efficiency large branch network and on diversification of the funding base.

VTBA is Armenia’s fourth largest bank, with 10% of the banking system’s loans and retail deposits by end of the first half of 2006.