Fitch Ratings has upgraded the long-term foreign currency issuer default ratings (IDRs) of seven Ukrainian banks to ‘B-‘ from ‘CCC’, Fitch has said in a press release.
The banks are State Export-Import Bank of Ukraine (Ukreximbank), State Savings Bank of Ukraine (Oschadbank), Alfa-Bank, Ukrsotsbank, ProCredit Bank (Ukraine), Credit Agricole Bank and Pravex-Bank.
The outlooks on six of the banks’ long-term IDRs are stable, the outlook on Pravex-Bank is negative.
According to the press release, 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.
The upgrades of the long-term local currency IDRs of ProCredit Bank, Pravex and Credit Agricole Bank to ‘B’ from ‘B-‘, i.e. one notch above the ‘B-‘ sovereign rating, reflects the strength of the expected shareholder support for these entities.
The affirmation of Alfa-Bank (Ukraine)’s and Ukrsotsbank’s long-term local currency IDRs and Alfa-Bank (Ukraine)’s senior debt ratings at ‘B-‘ reflects Fitch’s view of potential support both banks’ may receive from other assets controlled by their main shareholders, including their sister bank, Russia-based OJSC Alfa-Bank (AB; BB+/negative). The probability of support is limited, in Fitch’s view, due to the banks’ indirect relationship with other Alfa Group assets and the mixed track record of support (for Alfa-Bank (Ukraine) from the shareholders.
The negative outlooks on Pravex and the downgrade of its national rating to ‘AA+(ukr)’ from ‘AAA(ukr)’ reflect the likelihood of the bank’s ultimate sale and hence the probable reduction in potential shareholder support. Fitch said that Pravex was currently fully owned by Intesa Sanpaolo S.p.A. (Intesa, BBB+/negative). The bank has been up for sale since early 2014, although with little apparent progress so far with its disposal and the absence of any named potential buyer.
Alfa-Bank (Ukraine) and Ukrsotsbank are both ultimately owned by ABH Holdings S.A. (ABHH), which is part of Alfa Group’s financial business and is the owner of several other banking subsidiaries, mostly in CIS. In October Ukrsotsbank former owner, UniCredit S.p.A. (UniCredit, BBB+/negative), transferred its 99.9% share in Ukrsotsbank to ABHH in exchange for 9.9% of ABHH’s shares.
ProCredit Bank is controlled (94% of voting stock) by Germany’s ProCredit Holding AG & Co. KGaA. (BBB/stable). Credit Agricole Bank is fully owned by Credit Agricole S.A. (A/positive). (Interfax/Business World Magazine)
