"The ratings reflect BR's rapid loan portfolio growth, which has the potential for increased loan losses, high concentrations in both assets and liabilities, and moderate capitalization, undermined by significant equity investments made through the bank's subsidiary, and underdeveloped corporate governance," Fitch said.
According to Fitch, the ratings also acknowledge the bank's reasonable earnings generation to date, its growing customer base - the sustainability of which, however, is of concern - its currently low loan impairment and limited market risk.
Bank Rossiya, which is majority-owned by Russian businessmen, is among Russia's top 50 banks. As of October 1, 2006, the value of the bank's assets was 30.2 billion rubles (about $1.14 billion) and its shareholder equity stood at 3.4 billion rubles (about $128 million).