April 17, 2018 / 6:01 PM / 6 months ago

No immediate rating impact on Russian banks after U.S. sanctions: Fitch

LONDON (Reuters) - Russian banks should be able to absorb credit losses stemming from exposure to individuals and companies targeted by U.S. sanctions, credit ratings agency Fitch said on Tuesday, adding it expected no immediate rating impact on the lenders.

But Fitch warned that the sanctions were credit negative for affected companies, which in turn increased the credit risk for banks.

Sberbank’s (SBER.MM) exposure to so-called Specially Designated Nationals (SDNs) — businessmen and companies they control — targeted by the U.S. sanctions amounted to about $11 billion or 20 percent of its equity, Fitch estimated.

Credit Bank of Moscow and Sovcombank have less exposure to new SDNs of about 10 percent of equity.

“Selling or unwinding (exposures) may be difficult without significant losses, or even impossible. If they remain on banks’ balance sheets, they may need to be restructured with extra provisioning,” Fitch warned.

But Fitch also said exposed banks did appear to have collateral or sufficient pre-impairment profitability to cover potential losses.

The agency said Gazprombank, Russian Agricultural Bank, Alfa, Tinkoff, Citi (C.N), Rosbank, UniCredit (CRDI.MI) and Raiffeisen have non-material or no exposure to new SDNs, relative to their equity.

Reporting by Sujata Rao. Editing by Jane Merriman

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