Fitch upgrades 7 Ukrainian banks on sovereign rating change
Fitch Ratings has upgraded the Long-Term Foreign Currency Issuer Default Ratings (IDRs) of seven Ukrainian banks to 'B-' from 'CCC', Fitch Ratings said in its press release.
The Outlooks on six of the banks' Long-Term IDRs are Stable, the Outlook on PJSCCB Pravex-Bank (Pravex) is Negative, according to Fitch.
The banks are JSC The State Export-Import Bank of Ukraine (Ukreximbank), JSC State Savings Bank of Ukraine (Oschadbank), PJSC Alfa-Bank (ABU), Ukrsotsbank (Ukrsots), ProCredit Bank (Ukraine) (PCBU), PJSC Credit Agricole Bank (CAB) and Pravex.
The revision of the Support Rating Floors (SRFs) to 'B-' from 'No Floor' and upgrades of state-owned Ukreximbank and Oschadbank reflect Fitch's view that the Ukrainian authorities' ability to provide support to the banks, in case of need, has somewhat improved. However, it remains limited, in particular in foreign currency, as indicated by the sovereign's 'B-' Long-Term Foreign Currency IDR. The propensity to provide support to these two banks remains high, in Fitch's view, particularly in local currency.
Fitch upgrades Ukraine to 'B-', outlook stableThe IDRs and senior debt ratings of all seven banks and the SRFs of Ukreximbank and Oschadbank are highly correlated with the sovereign's credit profile. The ratings could be downgraded and SRFs revised downwards in case of a sovereign downgrade. The banks' IDRs and debt ratings could also be downgraded in case of restrictions being imposed on their ability to service their obligations (not currently expected by Fitch).
A significant weakening of the ability and/or propensity of shareholders to provide support (not the base case scenario for Fitch) could also result in downgrades.