S&P downgrades PrivatBank

S&P said it lowered the long-term counterparty credit ratings on CB PrivatBank to R from B-, along with its short-term counterparty credit ratings to R from C.

The downgrade reflects the regulatory risk related to the National Bank of Ukraine's declaration of PrivatBank as insolvent, the bank's nationalization and as the possible introduction of a moratorium on some of PrivatBank's credit obligations by the government, S&P explained.

On Dec. 18, Ukraine authorities approved the state's participation in the recapitalization of PrivatBank, the agency said.

In accordance with this decision, 100% of the bank's shares will be held by the state, which is represented by the Ministry of Finance of Ukraine, S&P said.

The nationalization is reportedly caused by increasing concerns over related-party lending and the bank's ability to clean up its loan book and meet capital ratio requirements, the agency said.

The R designation indicates that PrivatBank is under regulatory supervision, according to the agency’s criteria.

S&P also said it does not rate any debt issued by PrivatBank.

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