Fitch Ratings has today downgraded the Long-term Issuer Default ratings (IDRs) of 10 Ukrainian banks and their Support ratings and revised downwards the Support Rating Floors of four of these banks, Fitch Ratings reported. The Outlooks on the Long-term IDRs remain Negative. This follows the downgrade of Ukraine`s Long-term foreign and local currency IDRs to `B+` from `BB-` (BB minus) with Negative Outlook (see the announcement on `www.fitchratings.com`). A full list of rating actions is available at the end of this announcement.
The downgrade of the IDRs and Support ratings of Swedbank, Forum, ProCredit Ukraine, VTBU, UkrSib, Ukrsots and Pravex reflects the downgrade on Ukraine`s Country Ceiling to `B+` from `BB-` (BB minus). The Country Ceiling of Ukraine limits the extent to which support from the shareholders of these banks can be factored into their Long-term foreign currency IDRs, and their Long-term local currency IDRs also take into account Ukrainian country risks.
Swedbank is 100%-owned by Swedbank AB (`A+`/Negative), Forum is majority (60%+one share)-owned by German Commerzbank AG (`A`/Rating Watch Negative), ProCredit Ukraine is 60%-owned by Germany`s ProCredit Holding AG (`BBB-` (BBB minus)/Stable), VTBU is more than 99%-owned by Russia`s JSC Bank VTB (`BBB+`/Stable), UkrSib is 51%-owned by France`s BNP Paribas (`AA`/Stable), Ukrsots is 94%-owned by Italy-based UniCredit (`A+`/Negative) and Pravex is 100%-owned by Italy`s Intesa Sanpaolo (`AA-` (AA minus)/Stable). The Long- and Short-term IDRs and Support ratings of these banks reflect the limited probability of support being forthcoming from their majority shareholders, in case of need.
The downgrade of the Long-term IDRs and Support ratings of Oschadny and Ukreximbank reflect the reduced ability of the government to provide support in case of need as reflected in the downgrade of Ukraine`s Long-term IDRs. Oschadny`s and Ukreximbank`s Long- and Short-term IDRs and Support ratings reflect Fitch`s view of the strong propensity of the Ukrainian authorities to provide support for these banks in case of need, although the ability to provide that support is less certain now. Both Oschadny and Ukreximbank are 100%-owned by the state (represented by the Cabinet of Ministers of Ukraine). Non-binding letters of support from the government have been provided in the offering circulars of Ukreximbank`s international debt issues (the most recent dated March 2007).
The downgrade of the Privat bank`s Support rating and revision of its Support Rating Floor reflects Fitch`s view that the Ukrainian authorities now have limited ability to provide support if required, as reflected in the `B+` sovereign Long-term IDRs, although there is a propensity to support the bank in case of need, based on Privat`s size and importance to the Ukrainian banking sector: it is the country`s largest bank (privately owned) with a share of approximately 10% in sector assets and 15% in retail deposits.
The downgrade of the Long-term and Short-term IDRs and revision of the Support Rating Floor of Nadra Bank reflect the reduced ability of the government to provide support in case of need, despite the propensity of the latter to provide such support to a bank of Nadra`s size. Nadra is the seventh-largest Ukrainian bank by asset size, with a presence in the retail segment and about 3.4% of system assets at end-H108.
OJSC Swedbank (Swedbank):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D/E`
--National Long-term rating: affirmed at `AAA(ukr)`; Outlook Stable
Bank Forum (Forum):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Senior unsecured debt: downgraded to `B+` from `BB-` (BB minus), assigned Recovery Rating `RR4`
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D/E`
--National Long-term rating: affirmed at `AAA(ukr)`; Outlook Stable
ProCredit Bank (Ukraine) (ProCredit Ukraine):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Short-term local currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D`
--National Long-term rating: affirmed at `AAA(ukr)`; Outlook Stable
JSC VTB Bank (Ukraine) (VTBU):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D/E`
--National Long-term rating: affirmed at `AAA(ukr)`; Outlook Stable
JSCIB UkrSibbank (UkrSib):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Senior unsecured debt: downgraded to `B+` from `BB-` (BB minus), assigned Recovery Rating `RR4`
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D`
--National Long-term rating: affirmed at `AAA(ukr)`; --Outlook Stable
Ukrsotsbank (Ukrsots):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
---Senior unsecured debt: downgraded to `B+` from `BB-` (BB minus), assigned Recovery Rating `RR4`,
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D`
Pravex Bank (Pravex):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Long-term local currency IDR: downgraded to `BB-` (BB minus) from `BB`; Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D/E`
--National Long-term rating: affirmed at `AAA(ukr)`; Outlook Stable
JSC State Savings Bank of Ukraine (Oschadbank) (Oschadny):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Long-term local currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D`
--Support Rating Floor revised to `B+` from `BB-` (BB minus)
--National Long-term rating: affirmed at `AA(ukr)`; Outlook Stable
JSC The State Export-Import Bank of Ukraine (Ukreximbank):
--Long-term foreign currency IDR: downgraded to `B+` from `BB-` (BB minus); Outlook remains Negative
--Senior unsecured debt: downgraded to `B+` from `BB-` (BB minus), assigned Recovery rating `RR4`
--Subordinated debt: downgraded to `B-` (B minus) from `B`, assigned Recovery rating `RR6`
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `4` from `3`
--Individual rating: affirmed at `D`,
--Support Rating Floor: revised to `B+` from `BB-` (BB minus)
--National Long-term rating: affirmed at `AA(ukr)`; Outlook Stable
CJSC Privatbank`s (Privat):
--Long-term foreign currency IDR: affirmed at `B`; Outlook Stable
--Short-term foreign currency IDR: affirmed at `B`
--Support rating: downgraded to `5` from `4`
--Individual rating: affirmed at `D`
--Support Rating Floor: revised to `B-` (B minus) from `B`
Nadra Bank (Nadra):
--Long-term foreign currency IDR: downgraded to `CCC` from `B-` (B minus); Outlook changed to Stable from Negative
--Senior unsecured debt: downgraded to `CCC` from `B-` (B minus), affirmed `RR4`
--Short-term foreign currency IDR: downgraded to `C` from `B`
--Support rating: affirmed at `5`
--Individual rating: affirmed at `E`
--Support Rating Floor: revised to `No Floor` from `B-` (B minus)
