Fitch affirms 4 Ukrainian state-owned banks’ ratings

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Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of JSC CB Privatbank (Privat), JSC State Savings Bank of Ukraine (Oschad), JSC The State Export-Import Bank of Ukraine (Ukrexim) and Public Joint-Stock Company Joint Stock Bank Ukrgasbank (UGB) at ‘B’, with Positive Outlooks.

At the same time, Fitch has upgraded Privat’s Viability Rating (VR) to ‘b’ from ‘b-‘, affirmed the ‘b-‘ VRs of the other three state-owned banks and removed all four entities’ VRs from Rating Watch Positive (RWP). The affirmations of the Long-Term IDRs, Support Ratings and Support Rating Floors of all four banks reflect Fitch’s view of potential support these banks could receive from the sovereign, if required. The Positive Outlooks on the IDRs mirror that on the sovereign.

The propensity of the Ukrainian authorities to provide support to all four banks remains high, in Fitch’s view, taking into account their 100%-state ownership (95% for UGB), high systemic importance (greater for Privat and Oschad, given their 34% and 19% market shares in retail deposits, respectively), the record of capital support provided under different governments (Oschad, Ukrexim), post-nationalisation equity support to Privat, and the small cost of potential support to UGB due its moderate size. However, the ability of the authorities to provide support is limited, in particular in foreign currency, as indicated by Ukraine’s ‘B’ Long-Term Foreign-Currency IDR.

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