OREANDA-NEWS. Fitch Ratings has revised the Outlooks on the Long-term Issuer Default Ratings (IDRs) of ProCredit Bank Georgia (PCBG) and JSC Liberty Bank (LB) to Stable from Positive and affirmed the IDRs at 'BB' and 'B', respectively. Fitch has also affirmed the banks' Support Ratings at '3' and '4', respectively. A full list of rating actions is at the end of this commentary.

The revision of the Outlooks follows the revision of the Outlook on Georgia's sovereign rating to Stable from Positive (see "Fitch Revises Georgia's Outlook to Stable; Affirms at 'BB-', dated 17 April 2015 at www.fitchratings.com).

KEY RATING DRIVERS AND SENSITIVITIES: PCBG's IDRS AND SUPPORT RATING
The affirmation of PCBG's 'BB' Long-term IDRs, one notch above the sovereign rating, and '3' Support Rating, reflect Fitch's view of the moderate probability of support from the bank's 100% shareholder, ProCredit Holding AG & Co. KGaA (PCH; BBB/Stable). Fitch views the propensity of PCH to provide support to PCBG as high. The support considerations take into account the majority ownership, common branding, strong parental integration and a track record of timely capital and liquidity support from PCH. However, the extent to which this support can be factored into PCBG's ratings is constrained by Georgia's 'BB' Country Ceiling, which captures transfer and convertibility risks. PCBG's local currency Long-term IDR also takes into account Georgian country risks.

Changes to Georgia's sovereign rating, accompanied by a revision of the Country Ceiling, would be likely to affect PCBG's Long-term IDRs. A weakening in our view of the parental support available to PCBG could also result in a downgrade of PCBG's support-driven ratings, although this is not expected by Fitch.

KEY RATING DRIVERS AND SENSITIVITIES: LB'S IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR
LB's Long-term IDRs are underpinned by potential government support, as reflected in its '4' Support Rating and 'B' Support Rating Floor (SRF). The affirmation of LB's IDRs, Support Rating and SRF reflects Fitch's view that the authorities would still likely have a high propensity to support LB, given the bank's important social function in Georgia as the country's primary distributor of pensions and welfare payments and the banks' track record of government support.

Further movements in LB's support-driven ratings will reflect those on the Georgia's sovereign rating. At the same time, the bank's 'B' Long-term IDR, which is also at the level of the bank's 'b' Viability Rating (VR) could be upgraded in case of an upgrade of the VR. Fitch plans to review the bank's VR, along with those of other Georgian banks, by end-1H15.

The rating actions are as follows:
ProCredit Bank Georgia
Long-term IDR: affirmed at 'BB', Outlook revised to Stable from Positive
Short-term IDR: affirmed at 'B'
Long-term local currency IDR: affirmed at 'BB', Outlook revised to Stable from Positive
Short-term local currency IDR: affirmed at 'B'
Viability Rating: 'bb-', unaffected
Support Rating: affirmed at '3'

JSC Liberty Bank
Long-term IDR: affirmed at 'B', Outlook revised to Stable from Positive
Short-term IDR: affirmed at 'B'
Viability Rating: 'b', unaffected
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B'.