London, 01 March 2022 -- Moody's Investors Service ("Moody's") today placed
on review for downgrade the long-term ratings and assessments of
seven Ukrainian banks following Moody's review for downgrade of Ukraine's
B3 sovereign rating on 25 February 2022. (please see https://www.moodys.com/research/--PR_461633)
Specifically, the following ratings and assessments were affected
by today's rating action:
(1) The long-term bank deposit ratings, Baseline Credit Assessments
(BCAs), Counterparty Risk Ratings (CRRs), Counterparty Risk
Assessments (CR Assessments) of seven banks (Privatbank, Savings
Bank of Ukraine, Ukreximbank, JSC "Raiffeisen Bank",
Pivdennyi Bank, JSCB, TASCOMBANK JSC, Bank Vostok PJSC);
(2) The long-term senior unsecured debt ratings of two banks (Savings
Bank of Ukraine and Ukreximbank);
(3) The long-term subordinated debt rating of one bank (Ukreximbank);
(4) The National Scale Ratings (NSRs) of five banks (Savings Bank of Ukraine,
JSC "Raiffeisen Bank", Pivdennyi Bank, JSCB,
TASCOMBANK JSC, Bank Vostok PJSC)
Please click on this link https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_ARFTL463288
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and identifies each affected issuer.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE
OF THE RATINGS
The review for downgrade of the seven banks' ratings and assessments
reflects Moody's expectations that their ratings will likely be downgraded
in case of a downgrade of the sovereign rating, given that most
banks have large direct exposure (more than 100% of their shareholders'
equity) to the domestic debt issued by the national government,
and that this therefore constrains Ukrainian banks' BCAs to the
same level as the country's sovereign rating.
The rating action also captures Moody's view that a protracted military
conflict in Ukraine would heighten liquidity challenges in the banking
system, severely disrupt the banks' operating environment and ultimately
lead to a significant deterioration in the banks' credit profiles.
On 24 February, Ukraine declared martial law and the National Bank
of Ukraine (NBU) imposed temporary measures impacting the banking system,
including restrictions on certain cash transactions to address increasing
liquidity challenges facing the banks.
A positive rating action on the financial institutions' ratings
is currently unlikely, given the review for downgrade. However,
their ratings could be confirmed in the event of confirmation of the Ukraine's
sovereign debt rating. The ratings could be downgraded in the event
of a downgrade of the Ukraine's sovereign debt rating, and/or
severe deterioration of the banks' operating environment or credit
The principal methodology used in these ratings was Banks Methodology
published in July 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1269625.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks.
NSRs differ from Moody's global scale credit ratings in that they are
not globally comparable with the full universe of Moody's rated entities,
but only with NSRs for other rated debt issues and issuers within the
same country. NSRs are designated by a ".nn"
country modifier signifying the relevant country, as in ".za"
for South Africa. For further information on Moody's approach to
national scale credit ratings, please refer to Moody's Credit rating
Methodology published in May 2016 entitled "Mapping National Scale Ratings
from Global Scale Ratings". While NSRs have no inherent absolute
meaning in terms of default risk or expected loss, a historical
probability of default consistent with a given NSR can be inferred from
the GSR to which it maps back at that particular point in time.
For information on the historical default rates associated with different
global scale rating categories over different investment horizons,
please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1280297.
The List of Affected Credit Ratings announced here are a mix of solicited
and unsolicited credit ratings. For additional information,
please refer to Moody's Policy for Designating and Assigning Unsolicited
Credit Ratings available on its website www.moodys.com.
Additionally, the List of Affected Credit Ratings includes additional
disclosures that vary with regard to some of the ratings. Please
click on this link https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_ARFTL463288
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and provides, for each of the credit
ratings covered, Moody's disclosures on the following items:
• EU Endorsement Status
• UK Endorsement Status
• Rating Solicitation
• Issuer Participation
• Participation: Access to Management
• Participation: Access to Internal Documents
• Releasing Office
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Moody's Investors Service Ltd.
One Canada Square
London E14 5FA
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454