Moody’s Investors Service has placed Ukraine’s Pravex-Bank’s B2 long-term global local currency deposit rating, its A3.ua National Scale Rating and its B2 long-term local currency debt rating on review for possible upgrade, following a takeover announcement by Intesa Sanpaolo, Itay’s biggest retail bank, for 504 mln euros (US$ 747 mln).
At the same time, Moody’s has assigned a positive outlook to the Ukrainian bank’s B2 long-term foreign currency deposit rating and has affirmed the E+ Bank Financial Strength Rating (BFSR) with a stable outlook.
Moody’s explained that depending on the assumed likelihood of parental support from Intesa Sanpaolo for Pravex-Bank following the completion of the acquisition, any support from Intesa Sanpaolo is likely to have a positive impact on the local currency deposit and debt ratings of Pravex-Bank. The acquisition is expected to be completed in the next few months.
According to the rating agency, Pravex-Bank’s foreign currency deposit rating would be constrained by the relevant country ceiling for Ukraine, which is currently at B2 with a positive outlook. As a result, this rating is unlikely to be upgraded upon the completion of the transaction and would move in tandem with Ukraine’s foreign currency deposit ceiling.
Moody’s understands that Pravex-Bank will continue to develop its retail activities with a network of around 556 branches (as of 1 January 2008) and may become one of the most active players in this market over the medium term. Pravex Bank’s share of retail lending reached 86% of the bank’s loan portfolio as of 1 October 2007.
Moody’s says that its rating review will focus on the implicit commitment and support from Intesa Sanpaolo as well as on the legal completion of the transaction and the receipt of all the necessary approvals from the Ukrainian and Italian authorities.
Pravex-bank is headquartered in Kyiv, Ukraine, and as of 1 October 2007 reported, under Ukrainian Accounting Standards (UAS), total assets of UAH 5.7 bln (US$1.2 bln) and a net profit of UAH 19.3 mln (US$3.8 mln).
After an intense period of domestic consolidation,
Intesa Sanpaolo already operates in several Balkan countries, the Czech Republic, Hungary and Russia. UniCredit bought
On Friday, Intesa Sanpaolo agreed to buy the 41% of
Shares in Intesa Sanpaolo were up 0.42% at 4.7825 euros at 1157 GMT, less than half the rise in the DJ Stoxx banks index .
