Fitch upgrades AK Bars Bank

Fitch Ratings said it upgraded AK Bars Bank's issuer default rating to BB- from B+, support rating to 3 from 4 and national long-term rating to A+(rus) from A-(rus). The B short-term rating and D individual rating were affirmed.

The outlook is stable.

The upgrade follows the upgrade of the Republic of Tatarstan's issuer default rating to BB+ from BB and, therefore, the higher ability of the republic to provide support to AK Bars in case of need. In Fitch's opinion, Tatarstan would have a strong propensity to support AK Bars in light of its controlling ownership, the servicing by AK Bars of the republic's budget, the bank's extensive retail franchise in the republic and AK Bars' importance to the republic's banking system.

Fitch said the individual rating reflects AK Bars' significant loan book concentrations, rapid loan growth, sizable related-party funding and ambitious expansion plans, which could elevate the bank's risk profile.

However, the individual rating also takes into account improving bottom-line results, currently strong capitalization, good asset quality and large shares in the local retail and corporate sectors, the agency added.

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