On May 16 of 2003 Moody's Investors Service assigned first credit ratings to BANK CASPIAN OJSC (Kazakhstan)

/IRBIS, June 19, 03/ - On May 16 of 2003 rating agency Moody's Investors Service assigned first credit ratings to BANK CASPIAN OJSC (Almaty). It became known due to the message of Moody's, which the bank presented to IRBIS agency on May 16. The message says that Moody's Investors Service has assigned to Bank Caspian (Caspian), Kazakhstan, an E+ Financial Strength Rating (FSR), and ratings of Ba3/NP for long- and short-term foreign currency deposits. All ratings carry stable outlooks. According to Moody's, the Ba3/NP foreign currency deposit ratings incorporate potential support from the Kazakhstani authorities, should the need arise, reflecting Caspian's relative importance to Kazakhstan's banking system. As at year-end 2002, Caspian was the country's ninth-largest bank by assets, the seventh-largest by customer loans, and the tenth-largest in terms of customer deposits. However, Moody's cautions that any outside support from the authorities in case of distress may be of a limited nature, and its volume and timeliness rather uncertain. This prevents the rating agency from placing the long-term foreign currency deposit rating at the Ba1 country ceiling for such deposits. Caspian's E+ FSR incorporates the bank's relatively weak but dynamically developing franchise and high levels of customer and sectoral concentrations in the loan book. The bank's liquidity remains ample although it has been gradually declining. The FSR is supported by stable performance, relatively good diversification in the funding base, good maturity matching of assets and liabilities as well as prevailing high asset quality despite rapid growth in lending in the recent past. Moody's views with caution the new management's strategic objective to very aggressively increase Caspian's size and market share and to strengthen its market position. At the same time, Moody's welcomes Caspian's retail banking initiatives, as the rating agency believes that retail banking in Kazakhstan remains underdeveloped, offers interesting business opportunities and may contribute to a further diversification of Caspian's credit portfolio while strengthening the bank's franchise, if successfully implemented. Moody's is concerned that dynamic growth in lending activities represents a challenge for credit-risk management and requires regular monitoring of the exposures. Despite this the bank has managed to defend a relatively high asset quality. Bank Caspian is headquartered in Almaty, Kazakhstan and reported total IAS-consolidated assets of KZT28.7 billion (US$191.4 million) as of 31 December 2002. [2003-06-19]