Fitch

Long-term foreign and local currency IDRs — ‘BBB-’, outlook stable
Short-term IDR — ‘F3’
Viability Rating — ‘b-’
Support Rating — ‘2’
Senior unsecured debt — ‘BBB-’

FITCH RATING ACTION

On 20 November 2019, Fitch affirmed Russian Agricultural Bank's (RusAg) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB-' with Stable Outlooks.

The affirmation of RusAg's IDRs reflects Fitch's view of the high propensity of the Russian authorities to support the bank, if required. 

RusAg’s ratings have been affirmed as follows: 

Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BBB-'; Outlooks Stable
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB-'
Senior unsecured debt: affirmed at 'BBB-'

FITCH RATING ACTION

On 19 August 2019, Fitch Ratings upgraded Russian Agricultural Bank's (RusAg) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) from 'BB+' to 'BBB-'. The Outlooks are Stable. The rating action follows Russian sovereign rating upgrade. RusAg's Long-Term Foreign Currency IDR and Support Rating Floor (SRF) of 'BBB-' reflect Fitch's view on strengthening of Russia's financial flexibility, and therefore ability to provide support, in case of need. 

RusAg’s ratings have been changed as follows: 

Long-Term Foreign- and Local-Currency IDRs: upgraded to 'BBB-' from ‘BB+’; Outlooks changed to ‘Stable’ from ‘Positive’
Short-Term Foreign-Currency IDR: upgraded to 'F3' from ‘B’
Viability Rating: 'b-', unaffected 
Support Rating: upgraded to '2' from ‘3’
Support Rating Floor: revised to 'BBB-' from ‘BB+’
Senior unsecured debt: upgraded to 'BBB-' from ‘BB+’; Outlook Stable

FITCH RATING ACTION

On 26 November 2018, Fitch Ratings affirmed Russian Agricultural Bank's (RusAg) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'. The Outlooks are Positive. RusAg's Long-Term Foreign Currency IDR and Support Rating Floor (SRF) of 'BB+' reflects Fitch's view of a very high propensity of the authorities to support the bank, in case of need.

RusAg’s ratings have been affirmed as follows:

Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BB+'; Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured debt: affirmed at 'BB+'

FITCH RATING ACTION

On 30 November 2017, Fitch Ratings affirmed the Long-Term IDRs of Russian Agricultural Bank (RusAg) at 'BB+'. The Outlooks on the IDRs of RusAg are Positive. The affirmation of the Long-Term Foreign Currency IDRs of RusAg at 'BB+' reflects Fitch's view of a very high propensity of the Russian authorities to support the bank, in case of need.

RusAg’s ratings have been changed as follows:

Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BB+'; Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured debt: affirmed at 'BB+'

RSHB Capital S.A.:
Senior unsecured debt: affirmed at 'BB+'

FITCH RATING ACTION

On 28 September, 2017 Fitch Ratings has revised the Outlooks to Positive from Stable on 23 Russian financial institutions, comprising Russian Agricultural Bank. The revision of the Outlooks on the Long-Term IDRs of Russian Agricultural Bank (BB+) reflects the increased likelihood of a strengthening of the government's ability to provide support. RusAg’s Long-Term Issuer Default Ratings (IDRs) have been affirmed. All other ratings are unaffected.

RusAg’s ratings have been changed as follows:

Long-Term Foreign and Local Currency IDRs: 'BB+'; Outlook revised to Positive; ratings affirmed
Short-Term Foreign Currency IDR: 'B'; unaffected
Viability Rating: 'b-'; unaffected
Support Rating: '3'; unaffected
Support Rating Floor: 'BB+'; unaffected
Senior unsecured debt: 'BB+'; unaffected

FITCH RATING ACTION

On 6 February 2017, Fitch has affirmed National Ratings of Russian banks, including Russian Agricultural Bank, and simultaneously withdrawn them. The affirmation of the National Ratings reflects limited changes since the last review. The National Ratings are being withdrawn because Fitch has withdrawn its Russian National-scale ratings in response to a new regulatory framework for credit rating agencies in Russia.

RusAg’s ratings have been changed as follows:

National Long-Term Rating: affirmed at 'AA+(rus)'; Outlook Stable; withdrawn
Long-Term Foreign and Local Currency IDRs: 'BB+'; Outlooks Stable; unaffected
Short-Term Foreign Currency IDR: 'B'; unaffected
Viability Rating: 'b-'; unaffected
Support Rating: '3'; unaffected
Support Rating Floor: 'BB+'; unaffected
Senior unsecured debt: 'BB+'; unaffected
National senior unsecured debt: affirmed at 'AA+(rus)'; withdrawn

RSHB Capital S.A.:

Senior unsecured debt: 'BB+'; unaffected
National senior unsecured debt: affirmed at 'AA+(rus)'; withdrawn

FITCH RATING ACTION

On 7 December 2016, Fitch affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Russian Agricultural Bank (RusAg) at 'BB+'. The Outlooks on the IDRs of RusAg are Stable.

The affirmation of the Long-Term Foreign Currency IDRs and Support Rating Floor (SRF) of RusAg at 'BB+' reflects Fitch's view of a very high propensity of the Russian authorities to support the bank, in case of need.

RusAg’s ratings have been affirmed as follows:

  • Long-Term Foreign and Local Currency IDRs: affirmed at 'BB+'; Outlooks Stable 
  • Short-Term Foreign Currency IDR: affirmed at 'B'
  • National Long-Term Rating: affirmed at 'AA+(rus)'; Outlook Stable
  • Viability Rating: affirmed at 'b-'
  • Support Rating: affirmed at '3'
  • Support Rating Floor: affirmed at 'BB+'
  • Senior unsecured debt: affirmed at 'BB+'/ 'AA+(rus)'
  • Senior unsecured debt of RSHB Capital S.A.: affirmed at 'BB+'/ 'AA+(rus)'

FITCH RATING ACTION

On 21 October 2016, Fitch affirmed the Issuer Default Ratings (IDRs) and debt ratings of Russian Agricultural Bank and revised the Outlooks on RusAg from Negative to Stable. The revision of the Outlooks reflects the reduced risk of a deterioration in the Russian authorities' ability to provide support.

The affirmation of the Long-Term IDRs and Support Rating Floors (SRF) of RusAg at 'BB+' reflects Fitch's view of a high propensity of the Russian authorities to support the bank in case of need, due to:

(i) majority state ownership (100%);
(ii) important policy role of supporting the agricultural sector;
(iii) the track record of support;
(iv) high reputational risks for the Russian authorities of a potential default.

RusAg ratings have been affirmed as follows:

  • Long-Term foreign- and local-currency IDRs: affirmed at 'BB+'; Outlooks revised to Stable from Negative
  • Short-Term foreign-currency IDR: affirmed at 'B'
  • Viability Rating: 'b-', unaffected
  • National Long-Term rating: affirmed at 'AA+(rus)'; Outlook Stable
  • Support Rating: affirmed at '3'
  • Support Rating Floor: affirmed at 'BB+'
  • Senior unsecured debt: affirmed at 'BB+'/ 'AA+(rus)'
  • Senior unsecured debt of RSHB Capital S.A.: affirmed at 'BB+'/ 'AA+(rus)'  

FITCH RATING ACTION

On December 10, 2015, Fitch has affirmed the Long-term Issuer Default Ratings (IDRs) of Russian Agricultural Bank (RusAg) at 'BB+'. The Outlook is Negative.

The affirmation of the Long-term foreign currency IDRs of RusAg at 'BB+', reflects Fitch's view of a very high propensity of the Russian authorities to support the bank, in case of need, due to:

(i) majority state ownership (100% of RusAg);
(ii) RusAg’s important policy role of supporting the agricultural sector;
(iii) the track record of support to the banks, including recent large recapitalisations through core Tier 1 eligible preferred share issues acquired by the state Depository Insurance Agency (DIA). Fitch considers this as good quality loss absorbing capital, and assigns it 100% equity credit;
(iv) and high reputational risks of a potential default for the Russian authorities.

The rating actions are as follows: 

  • Long-term foreign currency IDR: affirmed at 'BB+'; Outlook Negative 
  • Long-term local currency IDR: affirmed at 'BB+'; Outlook Negative
  • Short-term foreign currency IDR: affirmed at 'B' 
  • Viability Rating: affirmed at 'b-' 
  • National Long-term rating: affirmed at 'AA+(rus)'; Outlook Stable
  • Support Rating: affirmed at '3' 
  • Support Rating Floor: affirmed at 'BB+' 
  • Senior unsecured debt: affirmed at 'BB+'/ 'AA+(rus)' 
  • Senior unsecured debt of RSHB Capital S.A.: affirmed at 'BB+'/ 'AA+(rus)' 
  • 'Old-style' subordinated debt of RSHB Capital S.A.: affirmed at 'BB'

FITCH RATING ACTION

On February 13, 2015, Fitch Ratings affirmed the Viability Rating of Russian Agricultural Bank (RusAg) at 'b-'.

Russian Agricultural Bank’s ratings:

  • Long-term foreign currency IDR: 'BB+'; Outlook Negative, unaffected
  • Long-term local currency IDR: 'BB+'; Outlook Negative, unaffected
  • Short-term foreign currency IDR: 'B', unaffected
  • Viability Rating: affirmed at 'b-'
  • National Long-term rating: 'AA+(rus)'; Outlook Stable, unaffected
  • Support Rating: '3', unaffected
  • Support Rating Floor: 'BB+', unaffected
  • Senior unsecured debt: 'BB+'/ 'AA+(rus)', unaffected
  • Senior unsecured debt of RSHB Capital S.A.: 'BB+'/ 'AA+(rus)', unaffected
  • 'Old-style' subordinated debt of RSHB Capital S.A.: 'BB', unaffected

FITCH RATING ACTION

On January 16, 2015, Fitch Ratings has downgraded the Long-term foreign currency Issuer Default Ratings (IDRs) and debt ratings of 30 Russian and Russian-owned financial institutions by one notch. The rating actions follow the downgrade of Russia's sovereign ratings and revision of the Country Ceiling.

The downgrade of Russian Agricultural Bank to ‘BB+’ from ‘BBB-’ and the downward revision of the SRF reflect Fitch's view that Russia's financial flexibility, and therefore ability to provide support to the Bank, has somewhat reduced, as reflected by the downgrade of the sovereign rating.

The rating actions are as follows:

  • Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Negative
  • Long-term local currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Negative
  • Short-term foreign currency IDR: downgraded to 'B' from 'F3'
  • National Long-term rating: affirmed at 'AA+(rus)'; Outlook Stable
  • Viability Rating: 'b-'; unaffected
  • Support Rating: downgraded to '3' from '2
  • Support Rating Floor: revised to 'BB+' from 'BBB-'
  • Senior unsecured debt: downgraded to 'BB+' from 'BBB-' and to 'B' from 'F3'/ affirmed at 'AA+(rus)'
  • Senior unsecured debt: downgraded to 'BB+(EXP)' from 'BBB- (EXP)' / affirmed at AA+(EXP)(rus)'; Withdrawn
  • Senior unsecured debt of RSHB Capital S.A.: downgraded to 'BB+' from 'BBB-'/ affirmed at 'AA+(rus)'
  • "Old-style" subordinated debt of RSHB Capital S.A.: downgraded to 'BB' from 'BB+'

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On August 13, 2014, Fitch Ratings has affirmed Russian Agricultural Bank's Long-term Issuer Default Ratings at 'BBB-'. The Outlooks are Negative.

The affirmation reflects Fitch's assessment of potential high support from the Russian authorities for the bank, in case of need. The Negative Outlook on the bank's Long-term IDRs mirrors that on the sovereign and reflects potential deterioration of the government's ability to provide support, given the weakening economy and risks from sanctions.

Other ratings of Russian Agricultural Bank were affirmed at the current level.

FITCH RATING ACTION

On 24 March 2014 Fitch Ratings has revised the Outlooks on four Russian state-related banks, including Russian Agricultural Bank (RusAg), 10 foreign-owned banks and the largest privately-owned bank, Alfa Bank, as well as 9 largest Russian corporates. The rating action follows the revision on 21 March 2014 of the Outlook on Russia's sovereign IDRs to Negative from Stable.

The revision of the Outlook on the Long-term IDRs of RusAg reflects the increased likelihood of deterioration in the government's ability to provide support. The 'BBB-' Long-term IDRs, SRFs and senior debt ratings of RusAg, although they also factor in a high probability of state support, are notched down once from the sovereign, which is due to the only moderate capital injections to the bank relative to the scale of its asset quality problems, and the absence at present of any announced plans to inject future new equity.

The rating actions are as follows:

  • Long-term foreign and local currency IDRs: affirmed at 'BBB-'; Outlook revised to Negative from Stable
  • Short-term IDR: affirmed at 'F3'
  • National Long-term rating: affirmed at 'AA+(rus)'; Outlook Stable
  • Viability Rating: 'b-'; unaffected
  • Support Rating: affirmed at '2'
  • Senior unsecured debt: affirmed at 'BBB-'/'AA+(rus)'
  • Subordinated debt: affirmed at 'BB+'

FITCH RATING ACTION

On 14 August 2013 Fitch Ratings has downgraded Russian Agricultural Bank’s (RusAg) Long-term Issuer Default Ratings (IDRs) to ‘BBB-’ from ‘BBB’ and its Viability Rating (VR) to ‘b-’ from ‘b’, and removed them from Rating Watch Negative (RWN). The Outlooks on the bank’s Long-term IDRs are Stable.

The downgrade of the bank’s support-driven ratings, including its Long-term IDRs and senior debt rating, reflects the only moderate capital support made available to the bank relative to the declining asset quality, and the absence at present of any announced plans to inject new equity in the future. The downgrade also reflects Fitch’s current view that any change in RusAg’s status is unlikely to result in a material strengthening of the support framework for the bank. At the same time, RusAg’s ratings continue to reflect Fitch’s view of the high probability of support for the bank from the Russian authorities, in case of need. This view is based on the bank’s full government ownership (and exclusion from the privatisation programme), its policy role and the moderate size of RusAg’s balance sheet relative to the sovereign’s available financial resources.

The rating actions are as follows:

  • Long-term foreign and local currency IDRs: downgraded to ‘BBB-’ from ‘BBB’, Outlook Stable; off RWN
  • Short-term IDR: affirmed at ‘F3’, off RWN
  • National Long Term Rating: downgraded to ‘AA+(rus)’ from ‘AAA(rus)’ , Outlook Stable; off RWN
  • Viability Rating: downgraded to ‘b-’ from ‘b’; off RWN
  • Support Rating: affirmed at ‘2’; off RWN
  • Senior unsecured debt: downgraded to ‘BBB-’ from ‘BBB’; off RWN
  • Subordinated debt: downgraded to ‘BB+’ from ‘BBB-’; off RWN

FITCH RATING ACTION

On 16 November 2012 Fitch Ratings placed Russian Agricultural Bank's (RusAg) ratings on Rating Watch Negative (RWN). The RWN on RusAg’s ratings reflects Fitch’s concerns about the bank’s current asset quality and capital positions. However, Fitch’s base case expectation is that the Russian government will take measures to provide sufficient support to the bank. RusAg’s 'BBB' Long-Term Issuer Default Ratings are currently aligned with the Russian sovereign, and reflect Fitch's view that the bank will likely be supported by the Russian authorities in case of need. This reflects the bank's full government ownership, its policy role, the track record of government support to date and the moderate size of RusAg 's balance sheet relative to the government's available financial resources.

The reported 40 billion roubles equity injection, for which an amendment has been made to the 2012 federal budget, suggests that the Russian authorities intend to provide support to the bank. Other potential support measures, including further equity injections and purchases of some of the bank's impaired loans by other state-controlled entities, have also been discussed at government level. If the Russian authorities announce measures to recapitalise RusAg which are clearly sufficient to sustain RusAg’s asset quality, this would help support the ratings at their current levels.

FITCH WITHDRAWN ITS INDIVIDUAL RATINGS ON FINANCIAL INSTITUTIONS, OTHER RUSSIAN AGRICULTURAL BANK’S RATINGS MAINTAIN AT THE CURRENT LEVEL

On January 25, 2012, Fitch Ratings has withdrawn its Individual Ratings on financial institutions. This action follows the introduction on 20 July 2011 of Viability Ratings, which represent Fitch’s primary assessment of the intrinsic creditworthiness of financial institutions. The two rating scales had been maintained in parallel in order to facilitate an orderly transition to Viability Ratings from Individual Ratings.

Although Individual Ratings are being withdrawn, their history from assignment to withdrawal will continue to be available at www.fitchratings.com.

The Viability Rating reflects the same core risks as the legacy Individual Rating but with greater granularity and on a more familiar rating scale.

Fitch emphasises that this is not a fundamental change in its approach to bank ratings or a change in opinion on the creditworthiness of the entities covered.

Other Russian Agricultural Bank’s ratings maintain at the current level.

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On January 18, 2012, Fitch Ratings has affirmed the Long-term IDRs of four Russian state-owned banks at ’BBB’ with Stable Outlooks. Russian Agricultural Bank’s ratings were affirmed at the current level.

The rating actions follow Fitch’s revision of the Russian Federation’s Outlook to Stable from Positive and the affirmation of its Long-term foreign and local currency Issuer Default Ratings (IDRs) at ’BBB’ on 16 January 2012.

FITCH LAUNCHES VIABILITY RATINGS

On July 20, 2011, Fitch Ratings introduced Viability Ratings on financial institutions around the globe. These ratings represent Fitch's primary assessment of the intrinsic creditworthiness of these institutions. Russian Agricultural Bank’s Viability Rating is ‘b+’.

Fitch emphasises that this is not a fundamental change in its approach to bank ratings or a change in opinion on the creditworthiness of the entities covered. The Long-term Issuer Default Rating (IDR) will remain the primary issuer rating for financial institutions and is driven by an issuer's Viability Rating and its Support Rating. The Viability Rating reflects the same core risks as the legacy Individual Rating but with greater granularity and on a more familiar rating scale.

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On June 8, 2011, Fitch Ratings affirmed Russian Agricultural Bank's (RusAg) ratings, including its Long-term Issuer Default Ratings (IDRs) at 'BBB' with a Stable Outlook.

The bank's IDRs continue to be underpinned by Fitch's view of the high probability of support from the Russian authorities. This view is based on the bank's full state ownership; its policy role in agribusiness lending; the close association between the government and the bank, based on strong board representation and supportive policy statements; and the track record of providing fresh capital to the bank during the crisis.

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On September 10, 2010 Fitch Ratings affirmed Russian Agricultural Bank's (RusAg) Long-term Issuer Default Rating (IDR) at 'BBB' with Stable Outlook.

The affirmation of RusAg’s long-term IDR reflects the high probability of support available from the government of the Russian Federation in case of need - RAB is 100% owned by the government and as a State Agent for agribusiness development.

Also were affirmed: short-term foreign currency IDR at 'F3', national Long-term rating at 'AAA(rus)', outlook Stable, support Rating at '2', individual Rating at 'D'.

RusAg is the fourth largest bank in Russia in terms of assets. The bank has 60% market share in agribusiness lending and is number two by regional branch network development.

RUSSIAN AGRICULTURAL BANK RATING OUTLOOK RAISED TO STABLE BY FITCH RATINGS

On 22 January 2010, Fitch Ratings raised Russian Agricultural Bank outlook on the Long-term IDR to Stable from Negative and affirmed other ratings of the Bank. The upgrade of the outlook of RusAg’s long-term IDR reflects the high probability of support available from the government of the Russian Federation in case of need - RusAg is 100% owned by the government and as a State Agent for agribusiness development to a large degree performs policy role.

Fitch Ratings also raised outlooks on 13 Russian banks, three European banking subsidiaries of a Russian bank and two Russian leasing companies to Stable from Negative and affirmed their ratings.

The rating actions follow the agency’s revision of the Outlook on Russia’s Long-term Issuer Default Rating to Stable from Negative.

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On December 17, 2009 Fitch Ratings affirmed Russian Agricultural Bank's (RusAg) ratings at the current level.

RusAg's Long-term IDR reflects the potential support from the Russian authorities (Russia's sovereign rating is 'BBB'/Negative), considering the Bank's full ownership by the Russian state, its policy role in agribusiness lending and its significant systemic importance to the banking sector. RusAg is actively involved in the implementation of state policy in the agribusiness sector, thereby combining the roles of a commercial bank and a development institution.

RusAg’s Individual Rating is supported by the currently high capital position, which has been boosted during the crisis, and comfortable liquidity.

RusAg is the fourth largest bank in Russia in terms of assets, with a 3.2% market share in system assets at end-Q309. The bank has 60% market share in agribusiness lending and a leading presence in rural areas across Russia.

RUSSIAN AGRICULTURAL BANK RATINGS AFFIRMED BY FITCH RATINGS

On April 20, 2009 Fitch Ratings affirmed state-owned Russian banks’ IDRs and downgraded individual ratings of two banks. Russian Agricultural Bank’s ratings were affirmed at the current level.

The affirmation of RusAg's long-term IDR reflects the high probability of support available from the government of the Russian Federation in case of need - RusAg is 100% owned by the government and as a State Agent for agribusiness development to a large degree performs policy role. According to Fitch RusAg's individual rating of ‘D’ is supported by the Bank’s strong capitalization, following RUR 31.5 billion and RUR 45 billion of equity contributions from the state in August 2008 and February 2009, respectively, and RusAg's sound liquidity position.

RUSSIAN AGRICULTURAL BANK RATING DOWNGRADED FOLLOWING THE DOWNGRADE OF THE RUSSIAN FEDERATION LONG-TERM IDRS

On February 4, 2009 Russian Agricultural Bank Long-term foreign currency IDR was downgraded by Fitch Ratings to ‘BBB’ from ‘BBB+’, outlook negative, Short-term foreign currency IDR downgraded to ‘F3’ from ‘F2’, National Long-term rating: affirmed at ‘AAA(rus)’, outlook stable, Support rating: affirmed at ‘2’, and Individual rating: affirmed at ‘D’.

This action followed downgrade of the Russian Federation Long-term IDRs to ‘BBB’/negative from ‘BBB+’/negative, Short-term IDRs to ‘F3’ from ‘F2’ and the Russia’s Country Ceiling to ‘BBB+’ from ‘A-’. Altogether Fitch Ratings downgraded the IDRs of 14 Russian banks and three companies. The downgrade reflects Fitch opinion that the government’s ability to provide support in case of need has deteriorated.

FITCH RATINGS AFFIRMS RUSSIAN AGRICULTURAL BANK LONG-TERM FOREIGN CURRENCY IDR AT ‘BBB+’, OUTLOOK REVISED TO NEGATIVE FROM STABLE

On November 10, 2008 Fitch Ratings changed the outlooks on 12 banks of the Russian Federation to negative from stable and affirmed their ratings. Long-term foreign currency IDR of RusAg was affirmed at ‘BBB+’, outlook revised to negative from stable. This action follows revision of the outlook on the Russian Federation’s IDRs to negative from stable.


FITCH UPGRADES RUSSIAN AGRICULTURAL BANK TO INDIVIDUAL `D`

On September 05, 2006 Fitch Ratings upgraded Russian Agricultural Bank’s (RusAg) Individual rating to ‘D’ from ‘D/E’. The Bank’s other ratings are affirmed at Issuer Default 'BBB+' with a Stable Outlook, Short-term 'F2', Support '2'. The National Long-term rating has been affirmed at ‘AAA(rus)’ with a Stable Outlook.

The upgrade of the Individual rating reflects an extended track record of sound asset quality despite rapid portfolio expansion and adequate management of liquidity, market and credit risks. RusAg's Issuer Default, Short-term, National Long-term and Support ratings reflect the high probability of state support being received by the bank in case of need. This is based on RusAg's state ownership and key policy role in the development of the agricultural sector, as well as the ability of the Russian authorities to provide support, as indicated by the sovereign foreign currency Issuer Default rating of 'BBB+'. Movements in the sovereign rating are likely to drive further changes in the RusAg's Issuer Default rating.

FITCH UPGRADES RUSSIAN AGRICULTURAL BANK TO 'BBB+'/ 'F2'

On July 27, 2006 Russian Agricultural Bank (RusAg) was upgraded to IDR 'BBB+' from 'BBB' with a Stable Outlook, Short-term upgraded to 'F2' from 'F3', Individual affirmed at 'D/E', Support affirmed at '2', National Long-term affirmed at 'AAA(rus)' with Stable Outlook. RusAg's outstanding international senior unsecured debt is also upgraded to 'BBB+' from 'BBB'. Its RUB7 billion domestic senior unsecured debt issue, due 2011, is affirmed at 'AAA(rus)'.

Russian Agricultural Bank is one of the only 10 Russian banks that followed the recent upgrade of the Russian sovereign ceiling. This decision reflects Fitch's view of the Russian authorities' improved capacity to support these banks if required.

FITCH UPGRADES RUSSIAN AGRICULTURAL BANK TO 'BBB'/ 'AAA(RUS)'

On April 28, 2006 Fitch Ratings upgraded Russian Agricultural Bank's (RusAg) Issuer Default rating ("IDR") to 'BBB' from 'BBB-' (BBB minus) and National Long-term rating to 'AAA(rus)' from 'AA+(rus)'. Both Outlooks remain Stable. The Bank’s other ratings are affirmed at Short-term 'F3' and Support '2'. Fitch will review RusAg's Individual 'D/E' rating later in the year.

The upgrade reflects RusAg's increased strategic importance to the Russian authorities and the strengthening of its policy role during recent months. This is in view of the launch in January 2006 of the Agricultural Industry Development Project ("AIDP"), one of four national priority projects announced in September 2005 and being broadly overseen by President Vladmir Putin. As a result Fitch considers there to be a higher propensity of the Russian authorities to provide support for the bank in case of need. The project provides state support for the agricultural sector (in both cash and non-cash form) with a focus on small business and the welfare of individuals living in rural areas. RusAg is to operate as a government agent in the implementation of the project and is to benefit from further capital contributions (RUB3.7 billion in 2006) to assist in its role as a specialised agricultural bank.

RusAg was founded in 2000 and is 100%-owned by the Federal Agency on Federal Property Management. RusAg implements state policies in the agriculture and related sectors, providing credit, settlement and other financial services to these sectors and retail banking services to people living in rural areas. At end-2005, it was one of the 20 largest banks in Russia and the second largest lender to the agricultural sector, after Sberbank. Its nationwide branch network is expanding rapidly to ensure a deeper penetration of rural areas, and at end-Q106 comprised almost 400 outlets.

FITCH ASSIGNS RUSSIAN AGRICULTURAL BANK ‘BBB-’ RATING

On September 02, 2005 International rating agency Fitch Ratings assigned the following ratings to Russian Agricultural Bank (RusAg): Long-term BBB- (BBB minus), Short-term F3, Support 2, Individual D/E, National Long-term AA+(rus). The Outlooks on the Long-term and National Long-term ratings are Stable.

RusAg's Long-term, Short-term, Support and National Long-term ratings reflect Fitch’s view of the high probability of support being forthcoming, in case of need, from the Russian authorities, based on RusAg's state ownership, status as a government agent and important policy role, and taking into account the ability of the Russian authorities to provide support, as indicated by the sovereign Long-term Foreign Currency rating of ‘BBB’.

The Individual rating reflects RusAg's very high exposure to the high-risk agriculture sector, the risks associated with rapid loan growth, very weak profitability (mainly due to the costs of network expansion) and certain weaknesses in the operating environment. However, it also takes into account the Bank’s reasonable, to date, asset quality and the very low (for Russia) level of individual borrower concentration.

RusAg was founded in 2000 and is 100%-owned by the Federal Agency on Federal Property Management. RusAg is charged with implementing state policies in the agriculture sector, providing credit, settlement and other financial services to the Russian agricultural and related sectors, as well as providing retail banking services to people living in rural areas. At end-1H05, it was one of the forty largest banks in Russia, and the second largest lender to the agricultural sector, after Sberbank.