OREANDA-NEWS  On 14 October was announced, that Fitch international rating agency downgraded the long-term issuer default rating (IDR) of Rodovid Bank (PFTS: RODB) from B- to CCC. According to the agency, the short-term IDR of the banks was downgraded from B to C level, the individual rating – from D/E to E level and the national long-term rating – from BBB-(ukr) to BB-(ukr). Besides, the long-term IDR and the national long-term rating of Rodovid Bank have been included into Rating Watch Negative list. Meanwhile, Fitch confirmed the bank support rating at 5 level.

The ratings downgrading and including of ratings into Rating Watch Negative list reflects a difficult situation with the bank liquidity and significant short-term interbank funding, which is not covered by interbank or other liquid assets with relevant maturity dates. According to the agency, the rating downgrading also allows for exceptionally high exposure of Rodovid Bank to the risks in one of its projects in the real property development area and weaker perspectives of the real estate sector in the light of increasingly difficult credit market situation. Among other negative factors for the bank creditworthiness, Fitch points out at exceptionally rapid growth in lending volumes of late, moderate assets quality, low provisioning against loans depreciation, low profit margins and capitalization.

The agency plans to exclude the Rodovid Bank ratings from Rating Watch Negative in the short-run depending upon the situation with the bank liquid position. Meanwhile, its ratings may be again downgraded, if its liquidity deteriorates even further, and may be confirmed at the same levels if its liquidity and capitalization becomes worse.

The Rodovid Bank management explains the rating downgrade by current situation in the Ukrainian economy, deterioration of the country rating to the negative and the overall not too much favorable conditions of the banking market in Ukraine. It has become known that this financial institutions plans to issue its new shares. The bank expects to boost its registered capital by 22.9% or UAH 100 mn to UAH 535 mn.

In its turn, Moody's international rating agency downgraded the ratings of Prominvestbank. It downgraded the ratings of its financial stability from E+ to E level, the ratings of the long-term liabilities in the local and foreign currency – from Ba2 and B2 to, accordingly, Caa2 and the rating by national scale – from Aa1.ua to B3.ua level. The long-term liabilities ratings are placed under revision, while its direction remains uncertain. The Prominvestbank ratings revision was stipulated by appointment of temporary administration and concerns of the agency about its ability to keep on its operations. Moody's specifies in case of additional support from the regulator or financially robust strategic partner, which would assume the bank's liabilities, the ratings of its liabilities may be enhanced.