Fitch downgraded ratings of PrivatBank and ProCredit Bank to CCC

The global rating agency Fitch Ratings has downgraded the viability ratings of PrivatBank (Dnipropetrovsk) and ProCredit Bank (Kyiv) from B- to CCC and confirmed stability rating of Credit Agricole Bank (Kyiv) at the level of B-, according to the press release of Fitch.

The viability ratings of all three banks are excluded from the Negative list of Rating Watch.

The long-term Issuer Default Ratings (IDRs) in foreign currency of three banks were confirmed at CCC.

“The IDRs of Credit Agricole Bank (Ukraine) show the potential support of foreign shareholders, while the ratings of PrivatBank were stipulated only by credibility of the bank on a standalone basis,” according to the information.

The downgrade of the viability rating of PrivatBank to CCC shows its weak key financial indicators.

The downgrade of the viability rating of ProCredit Bank to CCC shows the deterioration asset quality of the bank and the potential for further depreciation of loans due to significant risks in the Donetsk oblast (9.5% of loans were issued at the end of Q3, 2014), a substantial share of foreign currency lending (35% of net loans), the recent rapid growth of lending (by 51% over eleven months 2014, adjusted for the effect of exchange rate fluctuations) and weakening of the operating environment.