Fitch Ratings has downgraded Fimbank’s long-term Issuer Default Rating to ‘BB-’ from ‘BB’, with a stable outlook. At the same time, Fitch affirmed Fimbank’s short-term IDR at ‘B’.

According to Fitch, the long-term IDR was downgraded to reflect the bank’s high risk appetite, which has resulted in a significant deterioration in the quality of its assets, as well as unstable and weak earnings, the group said in a company announcement.

The asset quality deterioration, which has been addressed by Fitch, is mainly attributable to severe impairments that impacted the performance of several entities in the Fimbank Group, in particular India and Russia.

Fitch also clearly indicated that a positive rating action would primarily stem from a substantial recovery of asset quality and earnings, and/or evidence of improved risk controls. These were all measures that Fimbank’s board of directors was already implementing, and positive results were expected in the short term, the group said.

The group said that the continued support of its shareholders, in particular Burgan Bank and United Gulf Bank, would allow it to overcome “these difficulties and face challenging times”.