Fitch upgrades Oschadbank, Ukreximbank to sovereign level

Fitch Ratings has upgraded the foreign currency ratings of seven Ukrainian banks – including state Oschadbank (OSCHAD) and Ukreximbank (EXIMUK) – to ‘B-‘ from ‘CCC’, as reported on Nov. 21. The upgrade followed an increase in the country’s rating ceiling and a sovereign rating hike made on Nov. 11. The Ukrainian government’s ability to provide support for state-owned banks “has somewhat improved,” but it remains limited in foreign currency, Fitch reported. “This view takes into account the banks’ 100%-state ownership, policy roles, high systemic importance, and the track record of capital support for the banks under different governments,” Fitch reported.

Alexander Paraschiy: This action brought no surprise after the upgrade of Ukraine’s sovereign rating.

Notably, another bank covered by Fitch, Privatbank (PRBANK), is not among the names that enjoyed the rating upgrade. The bank is still rated CCC, and it only has a downgrade risk, unless Ukraine’s central bank reports in the near future that it smoothly implements its recapitalization program (which does not look likely).

Among other possible ratings actions, we can expect Fitch’s upgrade of Ukrzaliznytsia’s (RAILUA) credit rating.