FITCH DOWNGRADES SEVEN KAZAKHSTAN FINANCIAL INSTITUTIONS ON SOVEREIGN RATING ACTION

/Fitch Ratings, London/Moscow, November 10, 08/ - Fitch Ratings has today downgraded by one notch the Long-term foreign currency Issuer Default Ratings (IDRs) of seven Kazakh financial institutions, namely BTA Bank (BTA), Kazkommertsbank (KKB), Halyk Bank (Halyk), ATF Bank (ATF), Development Bank of Kazakhstan (DBK), Astana Finance (AF) and KazAgroFinance (KAF). The Outlook on these ratings remains Negative. This follows today's downgrade of the sovereign ratings (see separate announcement on www.fitchratings.com). At the same time, the agency has affirmed the ratings of three other Kazakh banks: Alliance Bank, Bank Centercredit (BCC) and Temirbank. The Outlook on Alliance remains Negative and that on BCC remains Evolving. The Outlook on Temir is revised to Negative from Evolving. Fitch has also downgraded by one notch the Long-term IDRs of Moskommertsbank (the Russian subsidiary of KKB) and BTA Bank (Russia) (an affiliate of BTA), with their Outlooks remaining Negative. The ratings of two other BTA affiliates - Bank BTA-Kazan and BTA Bank (Georgia) - are affirmed, removed from Rating Watch and assigned Negative Outlooks. Finally, Fitch has downgraded by one notch the Individual ratings of BTA and KKB and states that there is now also downward pressure on Halyk's Individual rating. Banks' Individual ratings reflect their stand-alone financial strength without taking account of potential external support. A full list of rating actions is provided at the end of this announcement. The downgrades of the IDRs of six entities (BTA, KKB, Halyk, DBK, AF and KAF) reflect the reduced ability of the Kazakh authorities to provide support to these entities, following the sovereign downgrade. The Kazakh authorities' recently announced plans to inject capital into BTA, KKB, Halyk and Alliance confirm Fitch's long-held view of the very high propensity of the authorities to support banks which they judge to be systemically important. However, a two-notch differential between the ratings of the sovereign and BTA/KKB/Halyk has been retained in light of the large size of these banks, and in particular their foreign currency liabilities, relative to the size of the resources and foreign currency reserves of the sovereign, and other contingent claims on these resources. The affirmation of Alliance's ratings, and therefore the narrowing of the notching between Alliance and the sovereign, reflects the bank's inclusion in the authorities' capitalisation plans and confirmation thereby of its treatment as a systematically important bank. However, Alliance's IDR remains one notch below those of BTA, KKB and Halyk in light of its considerably smaller and declining market shares, which could potentially make it somewhat less likely than the big three banks to receive support in the future. The downgrade of ATF reflects increased Kazakh transfer and convertibility risks, as captured in the downgrade of the Country Ceiling (see announcement on sovereign ratings), which could limit ATF's ability to receive and utilise support from its parent, Italy's Unicredit S.p.A. ('A+'/Negative). The Negative Outlooks on ATF, BTA, KKB, Halyk, DBK, AF, KAF and Alliance reflect those on the sovereign. BCC's ratings, like those of Alliance, have been affirmed in light of the authorities' treatment of mid-sized banks as systemically important in its capitalisation plans. BCC's ratings do not yet receive any uplift as a result of potential support from Kookmin Bank ('A+'/Negative) in light of the minority shareholding of the latter and potential concerns about the ability of Korean banks to provide support for foreign affiliates. The Evolving Outlook on BCC's Long-term IDR reflects the potential for the rating to go down if the Kazakh sovereign is downgraded further and the potential for it to go up as Kookmin moves towards consolidating a majority stake in BCC. Fitch will also publish separate announcements on the Individual ratings of BTA, KKB and Halyk and on the rating actions taken in respect to Temir and BTA's foreign affiliates. Rating actions are as follows: BTA Bank Long-term foreign currency IDR: downgraded to 'BB' from 'BB+'; Outlook remains Negative Long-term local currency IDR: downgraded to 'BB' from 'BBB-' (BBB minus); Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' Short-term local currency IDR: downgraded to 'B' from 'F3' Support rating: affirmed at '3' Individual rating: downgraded to 'D' from 'C/D' Support Rating Floor: revised to 'BB' from 'BB+' Senior unsecured debt: downgraded to 'BB' from 'BB+' Tier 1 perpetual preferred securities: downgraded to 'B-' (B minus) from 'B+' Kazkommertsbank Long-term foreign currency IDR: downgraded to 'BB' from 'BB+'; Outlook remains Negative Long-term local currency IDR: downgraded to 'BB' from 'BBB-' (BBB minus); Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' Short-term local currency IDR: downgraded to 'B' from 'F3' Support rating: affirmed at '3' Individual rating: downgraded to 'D' from 'C/D' Support Rating Floor: revised to 'BB' from 'BB+' Senior unsecured debt: downgraded to 'BB' from 'BB+' Subordinated debt: downgraded to 'BB-' (BB minus) from 'BB' Tier 1 perpetual subordinated notes: downgraded to 'B-' (B minus) from 'B+' Halyk Bank of Kazakhstan Long-term foreign currency IDR: downgraded to 'BB' from 'BB+'; Outlook remains Negative Long-term local currency IDR: downgraded to 'BB' from 'BBB-' (BBB minus); Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' Short-term local currency IDR: downgraded to 'B' from 'F3' Support rating: affirmed at '3' Individual rating: affirmed at 'C/D' Support Rating Floor: revised to 'BB' from 'BB+' Senior unsecured debt: downgraded to 'BB' from 'BB+' Alliance Bank Long-term foreign currency IDR: affirmed at 'BB-' (BB minus); Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' Support rating: affirmed at '3' Individual rating: affirmed at 'D/E' Support Rating Floor: affirmed at 'BB-' (BB minus) Senior unsecured debt: affirmed at 'BB-' (BB minus) RUB-denominated senior unsecured debt: affirmed at 'A+(rus)' ATF Bank Long-term foreign currency IDR: downgraded to 'BBB' from 'BBB+'; Outlook remains Negative Short-term foreign currency IDR: downgraded to 'F3' from 'F2' Support rating: affirmed at '2' Individual rating: affirmed at 'D' Senior unsecured debt: downgraded to 'BBB' from 'BBB+' Bank Centercredit Long-term foreign currency IDR: affirmed at 'BB-' (BB minus); Outlook remains Evolving Short-term foreign currency IDR: affirmed at 'B' Support rating: affirmed at '3', Individual rating: affirmed at 'D' Support Rating Floor: affirmed at 'BB-' (BB minus) Senior unsecured debt: affirmed at 'BB-' (BB minus) Development Bank of Kazakhstan Long-term foreign currency IDR: downgraded to 'BBB-' (BBB minus) from BBB'; Outlook remains Negative Long-term local currency IDR: downgraded to 'BBB' from 'BBB+'; Outlook remains Negative Short-term foreign currency IDR: affirmed at 'F3' Short-term local currency IDR: downgraded to 'F3' from 'F2' Support rating: affirmed at '2', Support Rating Floor: downgraded to 'BBB-' (BBB minus) from 'BBB' Senior unsecured debt: downgraded to 'BBB-' (BBB minus) from 'BBB' Astana Finance Long-term foreign currency IDR: downgraded to 'BB' from 'BB+'; Outlook remains Negative Long-term local currency IDR: downgraded to 'BB' from 'BB+'; Outlook changed to Negative from Stable Short-term foreign currency IDR: affirmed at 'B' National Long-term rating: affirmed at 'A+(kaz)'; Outlook remains Stable Individual rating: affirmed at 'D/E' Support rating: affirmed at '3' Support Rating Floor: downgraded to 'BB' from 'BB+' Senior unsecured debt: downgraded to 'BB' from 'BB+' KazAgroFinance Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-' (BBB minus); Outlook remains Negative Long-term local currency IDR: downgraded to 'BBB-' (BBB minus) from BBB'; Outlook remains Negative Short-term foreign currency IDR: downgraded to 'B' from 'F3' National Long-term rating: affirmed at 'AA(kaz)'; Outlook remains Stable Support rating: downgraded to '3' from '2' Support Rating Floor: downgraded to 'BB+' from 'BBB-' (BBB minus) Temirbank Long-term foreign currency IDR: affirmed at 'BB-' (BB minus); Outlook changed to Negative from Evolving Short-term foreign currency IDR: affirmed at 'B' Support rating: affirmed at '3' Support Rating Floor: assigned at 'BB-' (BB minus) Individual rating: affirmed at: 'D/E' Senior unsecured debt: affirmed at 'BB-' (BB minus) Moskommertsbank Long-term foreign currency IDR: downgraded to 'B' from 'B+'; Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' National Long-term rating: downgraded to 'BBB-(minus)(rus)' from 'A- (minus)(rus)'; Outlook remains Negative Individual rating: affirmed at 'D/E' Support rating: affirmed at '4' BTA Bank (Russia) Long-term foreign currency IDR: downgraded to 'B' from 'B+'; Outlook remains Negative Short-term foreign currency IDR: affirmed at 'B' National Long-term rating: downgraded to 'BBB-(minus)(rus)' from 'A- (minus)(rus)'; Outlook remains Negative Individual rating: affirmed at 'D/E' Support rating: affirmed at '4' Senior unsecured debt: downgraded to 'B' from 'B+' Bank BTA-Kazan Long-term foreign currency IDR: affirmed at 'B'; Positive Watch removed, Negative Outlook assigned Short-term foreign currency IDR: affirmed at 'B' National Long-term rating: downgraded to 'BBB-(minus)(rus)' from BBB+(rus)'; Positive Watch removed, Negative Outlook assigned Individual rating: affirmed at 'D/E' Support rating: affirmed at '4' BTA Bank (Georgia) Long-term foreign currency IDR: affirmed at 'B'; Evolving Watch removed, Negative Outlook assigned Short-term foreign currency IDR: affirmed at 'B' Individual rating: affirmed at 'D/E' Support rating: affirmed at '4' Contact: James Watson, London, Tel. +44 207 682 7671 Alexei Kechko, Frankfurt, +49 69 76807 6243. Media Relations: Alla Izmailova, Moscow, Tel: +7 495 956 9903 Email: alla.izmailova@fitchratings.com Hannah Warrington, London, Tel: +44 (0) 207 417 6298 Email: hannah.warrington@fitchratings.com. [2008-11-11]