Moody’s: Ukraine’s credit profile could be badly damaged because of the PrivatBank

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The intervention of a new president of Ukraine in legal cases on the nationalization of PrivatBank will have an adverse impact on Ukraine’s credit rating. The international credit rating agency Moody’s said this in a statement on Wednesday.

“Ukraine’s credit profile would be badly damaged, if the country’s new president interfered in an acrimonious legal battle over the 2016 nationalization of the country’s biggest lender Privatbank,” reads the report. Moody’s said the banking sector changes, including the Privatbank move, had been one of the biggest economic reform successes of the last five years.

“Any threat to that progress – such as the potential that the new president would interfere in favor of (former owner) Igor Kolomoysky’s appeal of the Privatbank nationalization in local courts – would constitute a serious setback to the reform agenda,” Moody’s said.

“While not our base case as we attach a low probability to such a scenario, it would have a material adverse impact on Ukraine’s credit profile if it were to materialize,” the agency noted.

As reported, on April 18, 2019, Kyiv’s District Administrative Court, having considered at a court session the case on a lawsuit filed by businessman Ihor Kolomoisky to the NBU, the Cabinet of Ministers, the Deposit Guarantee Fund and the National Commission on Securities and the Stock Market, ruled that the nationalization of PrivatBank was illegal. The consideration of this case lasted from June 2017.

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