Fitch downgrades ATFBank (Kazakhstan) ratings, Outlook "Stable"
13.05.13 16:06
/Fitch Ratings, London, May 8, 13, Fitch Ratings English translation, KASE
headline/ – Fitch Ratings has downgraded ATF Bank JSC's Long-term Issuer
Default Ratings (IDRs) to 'B-' from 'BBB-'. The Outlook is Stable. A full
list of rating actions is at the end of this commentary.
KEY RATING DRIVERS
The downgrade reflects the removal from the ratings of potential support from
UniCredit S.p.A. ('BBB+'/Negative) following ATF's announcement on 2 May 2013
that UniCredit had completed the sale of the bank to KazNitrogenGaz LLP (not
rated). KazNitrogenGaz is a Kazakh-domiciled holding company, fully owned by
local businessman Galimzhan Esenov, and also holds majority stakes in two
small Kazakh insurance companies.
After the removal of support from UniCredit, ATF's Long-term IDRs are aligned
with its Viability Rating (VR). The ratings reflect the bank's weak asset
quality and negative profitability during the past four years, as well as some
uncertainty regarding the bank's strategy following the change of ownership and
the extent of any leverage taken on by the new shareholder as a result of the
acquisition. At the same time, the ratings are supported by ATF's currently
comfortable liquidity and an expected improvement in performance (see "Fitch
Affirms ATF Bank's Viability Rating at 'b-', Other Ratings Unaffected" dated
18 April 2013 at www.fitchratings.com).
RATING SENSITIVITIES
ATF's ratings could be upgraded if the bank improves asset quality metrics and
performance, related party lending remains moderate following the acquisition
and shareholder leverage in Fitch's view does not represent a significant
contingent risk for the bank. A weakening of asset quality and loss absorption
capacity or increase in related party exposures/shareholder risks could result
in downward pressure on the ratings.
The rating actions are as follows:
Long-term foreign and local currency IDRs: downgraded to 'B-' from 'BBB-',
Outlook Stable, removed from Rating Watch Negative (RWN);
Short-term foreign currency IDR: downgraded to 'B' from 'F3', removed from
RWN
National Long-term Rating: downgraded to 'BB-(kaz)' from 'AA(kaz)', Outlook
Stable, removed from RWN
Viability Rating: affirmed at 'b-'
Support Rating: downgraded to '5' from '2', removed from RWN
Support Rating Floor: assigned at 'No Floor'
Senior unsecured debt downgraded to 'B-' from 'BBB-', removed from RWN,
Recovery Rating assigned at 'RR4'
National senior unsecured debt rating downgraded to 'BB-(kaz)' from 'AA(kaz)',
removed from RWN
Subordinated debt downgraded to 'CCC' from 'BB+', removed from RWN,
Recovery Rating assigned at 'RR5'
National subordinated debt rating downgraded to 'B(kaz)' from 'AA-(kaz)',
removed from RWN
Perpetual subordinated notes downgraded to 'CC' from 'B+', removed from RWN,
Recovery Rating assigned at 'RR6'
Primary Analyst, Aslan Tavitov, Associate Director +7 495 956 7065
Secondary Analyst, Dmitri Abramov, Director +7 495 956 2409
Committee Chairman, Alexander Danilov, Senior Director +7 495 956 2408
Media relations:
Yulia Belskaya Von Tell, Moscow, tel.: + 7 495 956 9908/9901,
julia.belskayavontell@fitchratings.com
[2013-05-13]