Moody’s downgrades 12 Ukrainian banks

Moody's Investors Service has downgraded the global local currency (GLC) deposit ratings and the National Scale Ratings (NSRs) of 12 Ukrainian banks. It has also lowered the outlook to ‘stable’ from ‘positive’ on the B2 long-term global foreign currency (GFC) deposit ratings of 21 Ukrainian banks, while the local currency debt instruments issued by four banks and the foreign currency debt instruments issued by six have also been downgraded.
The rating action was triggered by Moody's decision to lower the country's local currency deposit ceiling to Ba1 from Baa1, following the imposition of a six-month suspension by the National Bank of Ukraine on early withdrawal of household term deposits in the commercial banking system.
The decision was taken since the global liquidity crunch, combined with the ongoing macroeconomic, financial and political challenges, diminished the probability that Moody's would raise the credit rating to Ba3 from B1 in the next 12 to 18 months, thus prompting the change in outlook.
"Following the downgrade to Ba1/Not Prime of the local currency bank deposit ceiling of Ukraine, the local currency deposit ratings of Ukrainian banks now benefit from a lower degree of systemic support due to the lower level of the support provider's rating,” explained Yaroslav Sovgyra, Vice President — Senior Credit Officer in Moody's Moscow-based Financial Institutions Group.
“In addition, the local currency deposit ratings of many Ukrainian banks are now constrained by the new local currency deposit ceiling for Ukraine at Ba1," he added.
Moody's downgraded the global local currency (GLC) and NSRs of Bank Nadra, Calyon Bank Ukraine, Index-Bank, ING Bank Ukraine, OTP Bank Ukraine, Pivdenny Bank, Privatbank, Raiffeisenbank Aval, Savings Bank of Ukraine, Ukreximban, Ukrsibbank and Ukrsotsbank.
Moody's lowered the outlook on the global foreign currency (GFC) long-term deposit ratings of the following banks to ‘stable’ from ‘positive’, following the change in outlook on the sovereign ceiling: Alfa Bank Ukraine, Bank Finance and Credit, Bank Nadra, Bank NRB, Calyon Bank Ukraine, First Ukrainian International Bank, Forum Bank, Index-Bank, ING Bank Ukraine, Kreditprombank, OTP Bank Ukraine, Pivdennyi Bank, Pravex-Bank, Privatbank Commercial Bank, Raiffeisen Bank Aval, Savings Bank of Ukraine, Swedbank Invest, Swedbank OJSC, Ukreximbank, Ukrsibbank and Ukrsotsbank.
Moody's downgraded the long-term global local currency and National Scale debt ratings of the following banks, following the reduction of systemic support assumptions for these banks due to the lower level of the systemic support provider's rating: Pivdennyi Bank, Raiffeisenbank Aval, Savings Bank of Ukraine and Ukrsotsbank.
Moody's has also downgraded the long-term foreign currency debt ratings of the following banks, either in line with their GLC ratings or because they are no longer eligible for piercing the country ceiling for foreign currency debt as their global local currency deposit ratings are now below the level at which piercing could be achieved: Ukreximban, Privatbank, Ukrsibbank, Ukrsotsbank, Bank Nadra and Bank Pivdenny.