Fitch Ratings-London/Moscow-10 July 2007: Fitch Ratings has today upgraded Ukraine-based Tas-Kommerzbank’s ("TAS") ratings to Long-term foreign currency Issuer Default (‘IDR’) 'BB-' (BB minus) from ’B-‘ (B minus), National Long-term ‘AAA(ukr)’ from ‘BBB-(minus)(ukr)’ and Support '3' from '5'. The ratings are removed from Rating Watch Positive. A Long-term local currency IDR of ‘BB’ has also been assigned. Both Long-term IDRs are on Positive Outlook. The Outlook for National Long-term rating is Stable. The Short-term foreign currency IDR and Individual rating are affirmed at 'B' and 'D/E' respectively.
These rating actions follow the recent completion of the acquisition of a 100% stake in the bank by Sweden-based Swedbank (rated 'A+'/Outlook Stable). In addition, Fitch has withdrawn TAS’s sovereign-derived Support Rating Floor of ‘No Floor’.
The upgrade reflects Fitch's view of Swedbank's greater ability - as indicated by its Long-term IDR - compared with that of TAS' previous majority owners, to provide the bank with support in case of need. However, TAS’s Long-term foreign currency IDR is constrained by Ukraine's 'BB-' (BB minus) Country Ceiling, while the Long-term local currency IDR also takes into account the country's risks.
The Outlooks on TAS’s Long-term IDRs reflect the Positive Outlook on the sovereign rating (‘BB-’ (BB minus)). Should Ukraine be upgraded, both TAS’s Long-term foreign and local currency IDRs will follow suit.
The Individual rating reflects TAS's small size by international standards, potentially vulnerable standalone liquidity position, concentrated business and only adequate capitalization, given its expected rapid balance sheet growth. The rating also captures the growing retail franchise, the reasonable asset quality to date and limited market risks.
TAS is a relatively small Ukrainian bank, ranking number 13th by assets, with a national market share of around 2.5% in retail lending and 1.6% of retail deposits at end-2006. Its former 100% owner, Sergiy Tigipko, remains a CEO after the acquisition.
