On Monday, 7 December Standard & Poor’s Ratings Services upgraded PrivatBank’s long- and short-term counterparty credit ratings to ‘B-/C’. According to S&P analysts, PrivatBank remains one of the strongest banks in Ukraine despite the current difficult economic conditions.
Unfortunately, some Ukrainian mass media have started to spread the previous “technical” news from S&P of the technical downgrade of ratings (published on Friday, 4 December) by taking it out of context. According to the S&P methodology, PrivatBank’s ratings had to be temporarily downgraded to ‘SD’, which is a mandatory technical procedure for the period of the bank’s negotiations with its creditors on extending Eurobonds’ maturities.
According to the S&P release, the upgrade follows successful completion of PrivatBank’s negotiations with international investors and reflects the bank’s status as the leading commercial bank in Ukraine. As noted in the official report of S&P, PrivatBank’s activity is much more resistant to impact of the current economic and political crises in country than the activities of comparable Ukrainian banks. In S&P analysts’ opinion, PrivatBank is one of the strongest Ukrainian banks, and its business model remains effective even in this difficult financial situation.
According to S&P, PrivatBank has an adequate risk position, reflecting its more conservative risk assumption approach, more sophisticated risk management system, greater diversification of business and higher preparedness for losses which might occur than comparable Ukrainian banks. Considering the above mentioned, S&P analysts expect the asset quality indicators of PrivatBank to remain among the highest in the banking system of the country.