...Asset Quality Constrains Ratings: The ratings of Uraltransbank (UTB) reflect weak asset quality, moderate capitalisation (dented by credit losses) and a narrow franchise. The ratings also capture UTB's adequate pre-impairment profitability and comfortable liquidity position. Downside Risks From Restructured Loans: Non-performing loans (NPLs, more than 30 days overdue) were large at 21% of total gross book at end-2013 but fully covered by impairment reserves (IFRS). Restructured exposures, which would otherwise be NPLs, comprised a further 8.5% of gross loans at end-2013 and were weakly reserved. Loans were also concentrated: at end-2013, the 20 largest exposures accounted for 20% of gross loans, although at least half of them are of moderate risk, in Fitch Ratings' view. Growth Challenges: Lending growth has been low from 2010, constrained by high competition, while UTB has tightened underwriting standards after the 2008 financial crisis. UTB targets growth acceleration in the SME segment...
