Fitch Ratings has upgraded the Long-Term Foreign Currency Issuer Default Ratings (IDRs) of seven Ukrainian banks to `B-` from `CCC`, Fitch Ratings said in its press release.
The Outlooks on six of the banks` Long-Term IDRs are Stable, the Outlook on PJSCCB Pravex-Bank (Pravex) is Negative, according to Fitch.
The banks are JSC The State Export-Import Bank of Ukraine (Ukreximbank), JSC State Savings Bank of Ukraine (Oschadbank), PJSC Alfa-Bank (ABU), Ukrsotsbank (Ukrsots), ProCredit Bank (Ukraine) (PCBU), PJSC Credit Agricole Bank (CAB) and Pravex.
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. However, it remains limited, in particular in foreign currency, as indicated by the sovereign`s `B-` Long-Term Foreign Currency IDR. The propensity to provide support to these two banks remains high, in Fitch`s view, particularly in local currency.
The IDRs and senior debt ratings of all seven banks and the SRFs of Ukreximbank and Oschadbank are highly correlated with the sovereign`s credit profile. The ratings could be downgraded and SRFs revised downwards in case of a sovereign downgrade. The banks` IDRs and debt ratings could also be downgraded in case of restrictions being imposed on their ability to service their obligations (not currently expected by Fitch).
A significant weakening of the ability and/or propensity of shareholders to provide support (not the base case scenario for Fitch) could also result in downgrades.