Fitch also affirmed the other ratings of the bank, which plans to hold an initial public offering in 2006, at short-term B, individual D and Support 4.
"The upgrade in Rosbank's ratings reflects the growth and diversification of Rosbank's business, following the integration with OVK banks, acquired by Interros (Rosbank's major shareholder) in 2003, the resulting diversification in the loan book and gradual improvements in the operating environment," the agency said.
About 97% of Rosbank shares are controlled by Interros, one of Russia's largest financial industrial groups.
However, the agency also said the ratings also reflected its concerns over historically weak core profitability, Rosbank's continued reliance on related-party funding and growing credit risk in its retail portfolio.
"Upward pressure on Rosbank's ratings could result from a substantial strengthening in Rosbank's core profitability and successful development of the bank's retail franchise in the regions, if combined with acceptable asset quality. Downside pressure is unlikely at the moment," the agency said.
Rosbank was founded in 1992 and ranks among the top 10 banks in Russia by total assets. Its shareholder equity as of January 1, 2006, was 20.4 billion rubles (about $713 million).
