Fitch Rates Kazakhstan's Tsesnabank 'B-'

/REUTERS, September 20, 06/ - Fitch Ratings has today assigned Kazakhstan- based Tsesnabank ("TSB") ratings of Issuer Default 'B-' (B minus) with Stable Outlook, Short-term 'B', Support '5', Individual 'D/E'. The ratings reflect TSB's small absolute size by international standards, significant, albeit declining, business and regional concentration levels on both sides of the balance sheet, notable liquidity risk exposure as well as certain weaknesses in the operating environment. However, they also take into account TSB's strong regional submarket positions, reasonable revenue generation and asset quality. Upside to the ratings could result from further growth of the bank's national franchise, helping to reduce regional and customer concentration levels. Narrower asset/liability mismatches would also be positive for TSB's ratings. Downward pressure could be triggered by asset quality problems arising from the rapid lending growth and portfolio seasoning. TSB was established in 1992 by Tsesna Corporation in Astana (formerly Tselinograd) as a bank predominantly serving captive companies within the same group. Shortly after the movement of the Kazakhstani capital to Astana, the bank underwent a period of business revival in an almost competition-free environment. However, Tsesna Corporation's position in the region has weakened and TSB has faced tougher competition from new market entrants. This has forced the bank to expand its activities beyond the group's regionally confined business and seek a more national presence. Nevertheless, the bank was able to retain its leading position in the region. TSB was the 13th-largest bank in Kazakhstan at end-July 2006, with only a small, but increasing, market share. Today the bank is ultimately owned by Mr Adylbek Djaksybekov (who has a 70% stake), the current chairman of the president's administration, and his family. Contact: Dmitri Angarov, James Watson, Moscow, Tel: +7 495 956 9901. Media Relations: Alla Izmailova, Moscow, Tel: +7 495 956 9903; Jon Laycock, London, Tel: +44 20 7417 4327. [2006-09-20]