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Moody's places Pravex-Bank (Ukraine) on review for possible upgrade

February 08, 2008 | Сbonds

Assigns positive outlook to the banks' foreign currency deposit rating

Moscow, February 08, 2008 -- Moody's Investors Service has today placed
Pravex-Bank's B2 long-term global local currency deposit rating, its
National Scale Rating and its B2 long-term local currency debt rating on
review for possible upgrade. At the same time, Moody's has assigned a
positive outlook to the bank's B2 long-term foreign currency deposit rating
and has affirmed the E+ Bank Financial Strength Rating
(BFSR) with a stable outlook.

Moody's explains that the review for possible upgrade was prompted by the
recent announcement that Intesa Sanpaolo (rated B-/Aa2/Prime-1) has signed a
share purchase agreement to acquire 100% of the share capital of
Pravex-Bank. Depending on the assumed likelihood of parental support from
Intesa Sanpoalo for Pravex-Bank following the completion of the acquisition,
any support from Intesa Sanpoalo is likely to have a positive impact on the
local currency deposit and debt ratings of Pravex-Bank. The acquisition is
expected to be completed in the next few months.

According to the rating agency, Pravex-Bank's foreign currency deposit
rating would be constrained by the relevant country ceiling for Ukraine,
which is currently at B2 with a positive outlook. As a result, this rating
is unlikely to be upgraded upon the completion of the transaction and would
move in tandem with Ukraine's foreign currency deposit ceiling.

Moody's understands that Pravex-Bank will continue to develop its retail
activities with a network of around 556 branches (as of 1 January 2008) and
may become one of the most active players in this market over the medium
term. Pravex Bank's share of retail lending reached 86% of the bank's loan
portfolio as of 1 October 2007. Moody's says that its rating review will
focus on the implicit commitment and support from Intesa Sanpaolo as well as
on the legal completion of the transaction and the receipt of all the
necessary approvals from the Ukrainian and Italian authorities.

Pravex-bank is headquartered in Kyiv, Ukraine, and as of 1 October 2007
reported, under Ukrainian Accounting Standards (UAS), total assets of UAH
5.7 billion (US$1.2 billion) and a net profit of UAH 19.3 million (US$3.8

Company: Pravex-bank

Full company namePublic joint-stock company commercial bank "PRAVEX-BANK"
Country of riskUkraine
Country of registrationUkraine


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