S&P assigns "В+/В" ratings to BTA Ipoteka (Kazakhstan)
15.10.04 11:08
/REUTERS, London, October 15, 04/ - Standard & Poor's Ratings Services
said today it assigned its 'B+/B' long- and short-term counterparty credit and
certificate of deposit ratings to Kazakhstan-based BTA Ipoteka (BTAI). The
outlook is stable.
"The ratings on BTAI are based on its concentrated and wholesale funding,
untested performance, fast growth and start-up nature, and the generally
risky economic environment in Kazakhstan," said Standard & Poor's credit
analyst Magar Kouyoumdjian. The ratings benefit from BTAI's strong position
in a lucrative niche sector, fairly good financial position given its start-up
nature, and its supportive shareholder. BTAI's strategic importance to its
parent, Bank TuranAlem (BTA; BB-/Positive/B) is a key positive rating factor,
as is the regulatory and business environment, which is conducive to
mortgage lending.
Established as the 100%-owned mortgage subsidiary of BTA in 2000, BTAI
holds a strong position in the fast-growing mortgage market in Kazakhstan,
with a 27% share. Although managerially independent, BTAI shares some of
its IT systems with BTA and relies on the bank for funding and capital
support. BTA is prepared to sell stakes to foreign specialized financial
institutions or multilateral agencies, but will maintain a majority stake of at
least 51% in BTAI.
Loans have grown very rapidly in the past three years, owing to the start-up
nature of BTAI, and account for the majority of its balance sheet.
The stable outlook reflects BTAI's strong foothold in the mortgage market,
which is projected to grow sixteen-fold over the next five years, presenting
opportunities for all market participants, particularly BTAI. Obtaining an 'A'
listing on the Kazakhstan Stock Exchange will help fund growth as well as
diversify BTAI's funding away from its parent.
"The future ratings on the bank will depend on the creditworthiness of BTAI's
parent as well as its commitment to its subsidiary," added Mr. Kouyoumdjian.
The ratings will also hinge on the maintenance of good asset quality given
fast growth within an untested market, success in diversifying funding away
from BTA, and generating returns to match those of BTAI's parent.
[2004-10-15]