International rating agency Fitch Ratings has upgraded the rating of joint-stock company Sens Bank from "cc" to "ccc-" and affirmed its long-term foreign currency issuer default rating, while the bank's outlook has been changed from "stable" to "positive".

According to the report, this upgrade of the VR follows the nationalization of Sens Bank and reflects the agency's view of a moderately lower risk of bankruptcy.

The agency believes that the acquisition of Sens Bank by the Ukrainian government has a positive impact on the bank's credit profile, as nationalization eliminates negative reputational risk and creates potential business and funding benefits.

The fact that the bank received a 'positive' outlook, which was affirmed at 'A(ukr)', suggests that the nationalization of Sens Bank may strengthen its creditworthiness compared to other local banks.

At the same time, Fitch noted that the government support rating (GSR) remains at 'not supported' (ns). According to the agency's experts, this indicates that if the bank violates its minimum capital requirements, its recapitalization will be unlikely in the short term.

"We believe that the bank will rely on regulatory forbearance to continue its operations," the experts said.

At the same time, it is reported that deposits at Sens Bank decreased by 18% by the end of the first quarter of 2023, since the beginning of the war, due to the negative reputation that the bank gained while being owned by people associated with Russia.

Nevertheless, the bank's liquidity remains at an acceptable level. For the whole of the current year, these deposits grew by 2%. The agency expects that the bank's deposit base will stabilize more effectively after the transition to state ownership.

It should be noted that after the nationalization, Sens Bank continued to operate as usual, without additional restrictions from the Deposit Guarantee Fund.