Fitch rates Kazakhstan's Eurasian Bank 'B-'

/REUTERS, July 12, 06/ - Fitch Ratings has today assigned Kazakhstan- based Eurasian Bank ('Eurasian') ratings of Issuer Default 'B-' with Stable Outlook, Short-term 'B', Support '5' and Individual 'D/E'. The IDR, Short-term and Individual ratings reflect Eurasian's to date limited franchise, the high, albeit declining, concentration levels on both sides of the balance sheet; substantial related-party exposure; and certain weaknesses in the operating environment. However, they also consider the bank's growing retail business franchise, which is driving balance sheet diversification, and adequate asset quality to date. Further expansion of the bank's scale and franchise, driving a decline in concentration levels and related-party exposure as well as diversification of the funding base, could be positive for Eurasian's ratings. Downside pressure could be triggered by asset quality problems arising from the rapid growth of retail lending, where the bank has limited track-record. The bank is owned by three business partners, whose major other assets include metals, mining and energy-producing enterprises which form the well- established Eurasian Industrial Association ('EIA'). In 2005 the companies of the EIA group jointly contributed up to 5% to national GDP. At end-June 2006, Eurasian was the ninth-largest commercial bank in Kazakhstan, with 2.3% of banking system assets. The bank started to develop its retail franchise in 2005. Contact: Dmitri Angarov, Alexei Kechko, Moscow, Tel: +7 495 956 9901. Media Relations: Alla Izmailova, Moscow, Tel: +7 495 956 9903. [2006-07-12]