Fitch affirms ProCredit Bank Ukraine at 'BB-'

(Interfax News Agency Via Thomson Dialog NewsEdge) MOSCOW. Sept 28 (Interfax) - Fitch Ratings on Thursday affirmed ProCredit Bank Ukraine's ("ProCredit Ukraine") ratings at foreign currency Issuer Default 'BB-' (BB minus), Short-term foreign currency 'B', local currency Issuer Default 'BB', Short-term local currency 'B', Individual 'D', and Support '3', the ratings agency said in a release.

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The Outlooks on the Issuer Default ratings ("IDR") are Stable. The national rating is affirmed at 'AAA(ukr)'.

The IDRs, Short-term and Support ratings of ProCredit
Ukraine are
based on Fitch's view of the potential support from its
owners,particularly ProCredit Holding AG ("PCH"; rated 'BBB-' (BBB minus)), its 60% owner, in case of need. However, the 'BB-' (BB minus) Country Ceiling of Ukraine limits the extent to which support can be factored into the IDRs. The ratings also take into account PCH's centralized control and risk management and ProCredit Ukraine's high degree of integration within the ProCredit group. The Stable Outlook on ProCredit Ukraine's IDRs reflects that of Ukraine's IDRs.

Fitch notes that any movement in the Country Ceiling for Ukraine would have implications for ProCredit Ukraine's IDRs. Downward movement in the Country Ceiling would also result in a change to the bank's Support rating.

"Upside potential for the Individual rating is currently limited by ProCredit Ukraine's small size," says Tomasz Walkowicz, an analyst at Fitch's Financial Institutions Group. "A significant deterioration in asset quality, capitalization and liquidity leading to a need for support would contribute to a downgrade."

ProCredit Ukraine is the 35th largest bank by total assets in Ukraine. In addition to PCH, its other shareholders include the European Bank for Reconstruction and Development and Western NIS Enterprise Fund (a U.S. body), which have a 20% stake each.

PCH was set up as an equity investment company in 1998 by Frankfurt-based Internationale Projekt Consult GmbH to invest in the global network of ProCredit banks, which provide financing to micro-and small and medium-sized enterprises in emerging markets. At end-May 2006, the group consisted of 19 banks in Central and Eastern Europe, Latin America and Africa, while the group's total assets were around EUR2.5 billion. PCH is responsible for group administration, strategy, risk management controls and supervision. PCH is not regulated as a banking group, but the ProCredit banks are regulated in their home countries.

Copyright 2006 Interfax News Agency. Source: Financial Times Information Limited.