The Outlook for the banking sector deteriorated

Прогноз для банковского сектора ухудшен

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

This Olfin learned from the statement of the Agency.

Analysts said that the pressure on the economy caused by the pandemic coronavirus, affects banks of Ukraine, Kazakhstan, Armenia, Azerbaijan, Belarus, Georgia, Russia.

The degree of pressure on the financial sector of these countries will depend on the duration of the crisis, as well as specific actions of the government. Economists stressed that the stability of the banking system will affect also the stable factors of profitability of the budget (oil prices, remittances of migrant workers, etc.).

The quality of corporate assets in the region will decline because of lower economic activity and high dollarization of loans because of the national currency are likely to fall in price.

The Agency predicts that interest rates on deposits, banks will have to increase moderately by weakening confidence in the national currencies.

Recall that during the first quarantine week some Ukrainian banks have already raised rates on deposits.

At the same time, the NBU said that the implications of the coronavirus for the economy, though to be negative, however, low energy prices can fix it. The NBU has enough margin, so the default out of the question.

In addition, the WTO said that the economic downturn and loss of jobs because of the pandemic coronavirus will be worse than the recession of 2008.