July 29 (SeeNews) - Fitch Ratings said on Monday that it has upgraded Bulgaria-based Expressbank and its wholly-owned unit OTP Leasing to long-term issuer default ratings (IDRs) of 'BB+' from 'BB', with stable outlook.
"The upgrades are driven by the increased support ability of their ultimate parent - Hungary's OTP Bank," Fitch Ratings said in a statement.
The ratings agency also upgraded OTP Bank's Russia-based unit Joint Stock Company OTP Bank (OTPR) to long-term IDR 'BB+' from 'BB'.
Fitch Ratings also said in its statement:
"KEY RATING DRIVERS
IDRS, SUPPORT RATINGS
The IDRs and Support Ratings of Expressbank, OTPR and OTP Leasing reflect our view of a moderate probability that they would be supported, if required, by their respective parents. The Stable Outlooks reflect the balanced credit risks of their immediate parents, OTP (for Expressbank and OTPR) and Expressbank (for OTP Leasing).
In our assessment of support from OTP we take into consideration the strategic importance of Bulgaria and Russia for OTP, high level of integration with the parent (for OTPR) and reputational damage for OTP from a potential default of its subsidiaries.
The IDRs of OTP Leasing are equalised with those of Expressbank as Fitch views the leasing company as the bank's core subsidiary. The company is an integral part of financial services provided by the bank and is strongly integrated into the parent group at the operational level, while funding is largely provided by its ultimate parent OTP.
We believe that any required support would be manageable relative to OTP's ability to provide it.
RATING SENSITIVITIES
IDRS, SUPPORT RATINGS
IDRs and Support Ratings of Expressbank and OTPR are sensitive to changes in Fitch's assessment of OTP's propensity and ability to provide support.
The IDRs and Support Rating of OTP Leasing are sensitive to changes in Expressbank's IDRs.
The rating actions are as follows:
Expressbank
Long-Term Foreign-Currency IDR upgraded to 'BB+' from 'BB'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Support Rating affirmed at '3'
Viability Rating unaffected at 'bb'
OTP Leasing
Long-Term Foreign-Currency IDR upgraded to 'BB+' from 'BB'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Support Rating affirmed at '3'
OTPR
Long-Term Foreign- and Local-Currency IDRs upgraded to 'BB+' from 'BB', Outlooks Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Support Rating affirmed at '3'
Viability Rating unaffected at 'bb-'"