OREANDA-NEWS. February 04, 2007. As informed by the Bank’s press service with the reference to Moody’s Investors Service press release.

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).