Fitch Ratings downgraded the banking sector of Ukraine

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

Fitch Ratings ухудшило прогноз по банковскому сектору Украины

This is stated in the message Agency, RBC-Ukraine online reports.

According to the report, economic pressure, caused by the spread of the coronavirus, affects banks of Ukraine, Kazakhstan, Armenia, Azerbaijan, Belarus, Georgia, Russia, and could lead to negative rating actions.

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.

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