MDM Holding GmbH is the ultimate parent company of MDM Bank.
James Longsdon, Senior Director in Fitch's Financial Institutions department in London, said: "We believe MDM Bank has the management and risk management know-how to deliver on its strategy and this could benefit its ratings over the medium term."
Fitch affirmed MDM Bank's issuer default rating and foreign currency senior unsecured debt at BB- (BB minus), with the outlook revised from stable to positive.
The agency statement said: "The Positive Outlook also reflects our view of the improving, albeit still challenging, Russian operating environment and the enhanced prospects for the country's leading privately-owned banks."
The agency affirmed MDM Bank's subordinated debt at B+ and the national long-term rating and ruble senior unsecured debt at A+(rus), with the outlook revised from stable to positive.
The short-term rating was affirmed at B, the individual rating at C/D and the support rating at 4, Fitch said.
The agency affirmed MDM Holding GmbH's issuer default rating at BB- (BB minus), with the outlook changed from stable to positive. The short-term rating was affirmed at B, the individual rating at C/D and the support rating at 5.
"MDM Bank's strategy to push more comprehensively into the middle market retail and SME segments, including in the Russian regions, may push up costs and dampen performance indicators in the near term, but is important in order to build a more diversified platform for future, sustainable revenue and earnings generation," the statement said.
MDM Bank is on a list of the country's top thirty banks in terms of their assets published by the Central Bank of Russia.
