Agency Fitch downgraded the banking sector of Ukraine

Агентство Fitch ухудшило прогноз по банковскому сектору Украины

International rating Agency Fitch Ratings has changed to negative the Outlook on the banking sector of seven post-Soviet countries, including Ukraine.

It is noted that economic pressures caused by the spread of the coronavirus, affects banks of Ukraine, Kazakhstan, Armenia, Azerbaijan, Belarus, Georgia, Russia, and could lead to negative rating actions.

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As noted, the degree of pressure on banks will depend on the extent and duration of the economic downturn, the specific risks for the national economy and external Finance (e.g. from lower oil prices, income from tourism or remittances), policies of national authorities and individual banks.

“The quality of corporate assets in the region will decline because of lower economic activity and high dollarization of loans as exchange rates come under pressure. This will add even greater problems in some markets, particularly in Ukraine, Kazakhstan, Belarus and Azerbaijan”, – analysts say.

According to the Agency forecasts, the rate on deposits of banks will moderately increase as the weakening of confidence in the national currencies.

4% or more: Credit Suisse has predicted a growth of the Ukrainian economy for two years

Earlier in March, 2020, the Agency Fitch Ratings affirmed long-term ratings of Ukraine in foreign and national currency at level “B” with a positive Outlook.

Fitch also expects acceleration of growth of the Ukrainian economy from 3.2% in 2019 to 3.5% in 2020 and 3.8% in 2021.

As reported, Fitch Ratings forecasts that Ukraine will receive the final approval of the Board of Directors of a new IMF program in the first half of 2020, but does not eliminate the latency.