(The following statement was released by the rating agency)LONDON/MOSCOW, October 10 (Fitch) Fitch Ratings has affirmed Sberbank Slovensko a.s.'s (SBSK) Long-term Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook. The agency has also affirmed SBSK's Viability Rating (VR) at 'bb-'. A full list of rating actions is at the end of this commentary.KEY RATING DRIVERS: IDRS AND SUPPORT RATINGSBSK's IDRs and Support Rating reflect the potential support the bank can expect from its ultimate owner, Sberbank of Russia (SBRF; BBB/Stable). Fitch believes the ultimate parent would have a high propensity to provide support to SBSK, if needed, in light of the strategic importance for SBRF of the broader central and eastern European region. This view also takes into account SBSK's small size relative to the parent's assets and capital base and therefore the low cost of potential support. At end-H113, SBRF controlled 99.39% of SBSK's shares via its 100%-owned Vienna-based subsidiary Sberbank Europe AG (SBEU; BBB-/Stable).RATING SENSITIVITIES: IDRS AND SUPPORT RATINGSBSK's Long-Term IDR would probably be downgraded or upgraded if there was a change in SBRF's Long-term IDR. Any marked revision of Fitch's view of SBRF's potential support to SBSK would also affect SBSK's IDRs.   KEY RATING DRIVERS: VRThe affirmation of SBSK's VR at 'bb-' takes into account the bank's ongoing recapitalisation and stronger reserve coverage of impaired loans, as well as low refinancing risks as a result of the limited use of non-deposit funding. At the same time, the VR factors in SBSK's small size and modest market shares, currently weak profitability and concentration risks in its loan book, in particular as a result of financing of real estate projects (net exposure equal to 0.8x Fitch core capital (FCC) at end-H113, down from 2.3x at end-H112).   High loan loss provisions, mostly driven by a loan book review by SBRF following the acquisition of SBSK, had a negative effect on SBSK's performance results during 2012-H113, which were also hit by the Slovakian bank levy. The bank budgets a return to profitability in H213, driven by the planned drop in new provisions as the portfolio clean-up has largely been completed, as well as higher loan growth. Low interest rates, competition and the relatively high cost base will remain constraints on profitability. NPLs (loans overdue by more than 90 days) were stable at around 7% of gross loans at end-H113 and end-2012, albeit above the sector average of 5.4%. In addition, restructured loans, which would have been in default if it was not for prolongations, accounted for a further 6.5% of loans at end-H113 (end-2012: 4.4%). NPL reserve coverage was over 100%, although this ratio varies significantly for different NPL categories, and overall coverage of NPLs and restructured loans was a more moderate 62%, reflecting the bank's significant reliance on collateral.  The FCC ratio improved to 10% at end-H113 from 7% end-H112, due to a new equity injection and the conversion of preferred shares into ordinary stock. A further planned EUR40m Tier I capital injection in Q413 and another EUR27m Tier II injection in 2014 should have a short-term positive effect on the bank's capital adequacy, creating flexibility to grow, notwithstanding modest internal capital generation. The bank targets maintaining a total regulatory capital ratio in excess of 11% (end-H113: 11.4%), which Fitch views as no more than adequate.  RATING SENSITIVITIES: VRUpside potential for SBSK's VR is currently limited, but the bank's credit profile would benefit from franchise diversification and a reduction in portfolio concentrations, and stronger profitability in a more favourable macroeconomic environment. Should the bank suffer large losses as a result of further deterioration in loan quality without this being offset by equity injections, the VR could be downgraded. The rating actions are as follows:Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook StableShort-term foreign currency IDR: affirmed at 'F3' Support Rating: affirmed at '2'Viability Rating: affirmed at 'bb-'Contact: Primary Analyst Olga IgnatievaDirector+7 495 956 6906Fitch Ratings MoscowValovaya str., 26MoscowSecondary AnalystArtur SzeskiSenior Director+48 22 338 6292Committee ChairpersonJames WatsonManaging Director+7 495 956 6657Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com.Additional information is available on 
  www.fitchratings.com
 Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 15 August 2012; 'Rating FI Subsidiaries and Holding Companies', dated 10 August 2012 and Evaluating Corporate Governance, dated 13 December 2011; are available at 
  www.fitchratings.com.
 Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181
 Rating FI Subsidiaries and Holding Companies
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209
 Evaluating Corporate Governance 
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=694649
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=804633
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