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Moody's reviews Prominvestbank's (Ukraine) Ba2 rating for possible downgrade

October 02, 2008 | Cbonds

B2 Foreign Currency Deposit Ratings /Not-Prime/Aa1.ua/E+ ratings are
affirmed

Moody's Investors Service has today placed
the Ba2 long-term local currency deposit rating of Prominvestbank on
review for possible downgrade. This relates to the lowering of the bank's
Baseline Credit Assessment from B1 to B2. At the same time, Moody's has
affirmed the B2 foreign currency bank deposit rating, which remains
constrained by the country ceiling, the Aa1.ua National Scale Rating
(NSR) and E+ Bank Financial Strength Rating (BFSR).

"The rating action reflects Moody's concerns that the run on deposits
currently being experienced by the bank may have a significant negative
impact on its franchise, already tight liquidity position and the
funding profile," explains Yaroslav Sovgyra, VP-Senior Credit Officer at
Moody's Moscow office. The rating agency notes that the bank's liquidity
was recently supported by a UAH5 billion refinancing facility from the
National Bank of Ukraine, thus indicating a high degree of systemic
support, the expectation of which was already incorporated into the
bank's ratings. However, the outflow of deposits currently being
experienced by the bank is likely to have a negative long term impact on
the bank's franchise, thus weighing down its stand-alone Baseline Credit
Assessment (BCA) of B2 and, consequently, the bank's supported deposit
ratings.

Moody's notes that its review for possible downgrade will be concluded
once there is more clarity over the impact of the deposit run on the
bank, including the effects on its liquidity position and the funding
base. Moody's notes that it considers the bank's liquidity metrics
rather tight for the particular business and funding profile.

Moody's first assigned Ba2/B2/Not-Prime/Aa1.ua/E+ ratings to
Prominvestbank in November 2007. The outlook on foreign currency bank
deposit rating, which is constrained by the country ceiling for Ukraine,
was stable, and the outlook on all other ratings was also stable.

Headquartered in Kiev, Ukraine, Prominvestbank reported unaudited
consolidated total assets of UAH27.5 billion (US$5.7 billion) and total
equity of UAH 2.8 billion (US$577 million) according to Ukrainian
Accounting Standards at 30 June 2008.

Company: Prominvestbank

Full company nameProminvestbank
Country of riskUkraine
Country of registrationUkraine
IndustryBanks

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