Fitch affirms 4 Ukrainian state-owned banks

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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 (Ukrgas) at ‘B’ with Stable Outlooks. Fitch has also affirmed the Viability Ratings (VRs) of all four banks at their current levels.

The affirmations of the IDRs, Support Ratings and Support Rating Floors of all four state-owned banks reflect Fitch’s view of potential support these banks could receive from the government of Ukraine (B/Stable), if needed. The Stable Outlooks on the IDRs mirror that on the sovereign. The IDRs of Privat are also underpinned by its standalone profile, as reflected in its ‘b’ VR.

The propensity of the Ukrainian authorities to provide support to all four banks remains high, in Fitch’s view, taking into account their full ownership by the state (except for Ukrgas at 95%), systemic importance (greater for Privat and Oschad, given their 32% and 19% market shares in retail deposits, respectively, at end-8M20), the record of capital support provided under different governments (Oschad, Ukrexim) and post-nationalisation equity support to Privat. However, the ability of the authorities to provide support is limited, particularly in foreign currency, as indicated by the level of Ukraine’s rating.

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