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Moody's upgrades Ukrsotsbank to Baa2/P-2/Ba2/D/Aaa.ua

January 30, 2008 | Сbonds

London, 30 January 2008 -- London, 29 January 2008-- Moody's Investors
Service has upgraded to Baa2/Prime-2 the local currency long-term debt and
deposit ratings of Ukrsotsbank ("the bank"), to D the bank Financial
Strength Rating (BFSR), to Aaa.ua National Scale Rating (NSR) and to Ba2
(positive outlook) the long-term debt rating of the bank's loan
participation notes. Moody's said that the bank's B2 long-term foreign
currency deposit rating was affirmed, with positive outlook, as it remains
constrained by Ukraine's B2 country ceiling for such deposits, whilst the
Ba2 long-term debt rating of the bank's loan participation notes has pierced
the respective Ba3 country ceiling for Ukraine.

Moody's noted that the upgrade has been prompted by the recent announcement
that Unicredit Group, the largest bank in Italy by total assets (rated
Aa2/P-1/B-), has completed, via its Austrian subsidiary Bank Austria
Creditanstalt AG (rated Aa2/P-1/C+), the acquisition of 94.2% of
Ukrsotsbank's shares and thus became a controlling shareholder of the bank.

Moody's understands that Ukrsotsbank will continue to focus on developing as
a universal bank providing a full range of services to both individuals and
corporates. The bank will continue to place an increased emphasis on retail
lending and development of the distribution network, but will also begin to
offer more sophisticated products to its corporate clients and SMEs. Moody's
said that the upgrade is driven by Moody's assessment of the implicit
commitment and support from Unicredit Group to Ukrsotsbank.

According to Moody's, the upgrade of the bank's BFSR to D was prompted by
the meaningful improvement in the bank's financial fundamentals in 2006 and
2007 -- in the form of increased recurring earning power, enhanced
efficiency and improved asset quality, improvement in the bank's funding
profile, liquidity position and capitalisation in 2007 as well as the
expected benefits of the bank's integration with Unicredit Group, especially
in the areas of corporate governance, credit and market risk management.

The following ratings were upgraded:

- local currency long-term bank deposit rating - to Baa2

- local currency short-term bank deposit rating - to Prime-2

- local currency long-term debt rating to Baa2

- foreign currency long-term debt ratings of loan participation notes issued
by Ukrsots Finance B.V. due 2008 to Ba2 (positive outlook)

- foreign currency long-term debt rating of loan participation notes issued
by Credit Suisse International on a limited recourse basis for the sole
purpose of funding an unsecured and unsubordinated loan to Ukrsotsbank due
2010 to Ba2 (positive outlook)

- bank financial strength rating to D

- national scale rating to Aaa.ua

The following ratings were affirmed:

- B2 long-term foreign currency deposit rating (positive outlook)

- Non-Prime short-term foreign currency debt and deposit ratings

Ukrsotsbank is headquartered in Kyiv, Ukraine, and as of 31 December 2007
reported Ukrainian Accounting Standards (UAS) total assets of UAH 31.2
billion (US$6.2 billion) and net profit of UAH 362.3 million (US$ 71.7
million).

Company: Ukrsotsbank

Full company nameUkrsotsbank PJSC
Country of riskUkraine
Country of registrationUkraine
IndustryBanks

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