The international rating agency affirmed Alfa-Bank’s long-term Issuer Default Rating at BB-, while the Rating Outlook was promoted from Negative to Stable.


Fitch reports the improvement in the rating outlook has to do with the recent general improvements in the country’s banking sector and with Alfa-Bank’s increased loss absorption capacity (partially caused by some fresh capital inflow).


At the same time, the rating agency claims Alfa-Bank’s bad debt (that is, debts that are more than ninety days overdue) rose up to 16.9% in the third quarter of 2009. On January 1, 2009, the figure only came to 1.1%, whereas the share of extended credit made up 9.8% of the total loan volume. Nevertheless, the increase in the amount of bad debt was most pronounced in the first half of the year, when the bank’s lending portfolio actually shrank by 20%. Then, Fitch is aware of Alfa-Bank’s great negotiating and toxic asset-management experience, so the agency’s experts believe the company will be able to minimize its loan loss in the long run.