Recommendation - Metropol decreased the value of Kazkommertsbank to $15.56 per GDR

/REUTERS, Almaty, June 2, 08/ - Russian investment company Metropol decreased valid cost of major bank in Kazakhstan Kazkommertsbank - from $20.07 to $15.56 per GDR, investment company informed on Monday. "We decrease our valid GDR cost of Kazkommertsbank by 22.5% compare to previous evaluation ($20.07 per GDR) to $15.56 per GDR" - is said in company's information. According to Metropol, in the forth quarter 2007 the bank showed sharp decreasing of growth: open revenue decreased by 10% compare to third quarter of 2007. Owing to it we decreased the forecast on annual growth of net income in 2008 and 2009 from 34.3% to 41.6% correspondently to 21.0% and 28.5% correspondently" - analysts mark. According to company's calculations, the potential of price decreasing on GDR compare to current market level ($16.24) makes 4.2%. In this respect we recommend "to hold bank's GDR". Besides, Metropol`s analysts expect reducing of credit portfolio on the bank in 2008. By company's information the bank is not capable even for partial refinancing its international borrowings ($2.2 bn.), payment term of which is in 2008. Evidently that the bank will use assets get from maturity of earlier given credits for their payment" - Metropol considers. According to analysts, as a result of this, the volume of huge credit portfolio in 2008 will reduce by 6.2%, in annual expression to $18.4 bn. but assets volume will reduce by 3.4%, in annual expression to $24.0 bn. According to Metropol`s analysts, the main reason of sharp increasing of the overdue credit stake (from 1.70% in 2006 to 3.31% ($688 m.) at the end of 2007) is that considerable part of credits the bank gave to construction companies (26% of corporate credit portfolio or $5.4 bn.) By autumn 2007 hosing prices in Kazakhstan decreased by 25-30%, what led to stoppage of many buildings construction. Global liquidity crisis which began in the second half of last year badly influenced Kazakhstan banks, actively borrowing assets abroad. According to Metropol, the stake of external borrowings in 2007 made 35.4% ($7.9 bn.) from bank's liabilities, what made it vulnerable before situation on international credit markets. Analysts consider that "the bank needs to change its funding structure, by increasing the stake of clients` accounts". Besides, analysts think that in 2009 the bank should borrow $1.3 bn. "or at least the part of this sum on international credit markets". In case of misfortunate the bank can appeal to emission of earlier registered but not offered 200 m. shares. In case of SPO, for attraction of investors` interest it can be realized on price lower than market's one, what can make pressure on market quotation of bank's shares" - is said in the information. In the middle of March 2008, bank representatives announced that they are waiting for income increasing by 20% but not waiting for assets growing and credit portfolio. [2008-06-02]