Fitch affirms ratings of Development Bank of Kazakhstan and ATFBank (Kazakhstan) assigns negative outlooks
16.06.09 11:47
/Fitch Ratings, London-Moscow, June 12, 09, heading by KASE/ - Fitch
Ratings has today affirmed the Development Bank of Kazakhstan's (DBK)
and ATF Bank's (ATF) Long-term foreign currency Issuer Default Ratings
(IDRs) at 'BBB-' and 'BBB' respectively. Fitch has simultaneously removed
their ratings from Rating Watch Negative (RWN) and assigned Negative
Outlooks. A full rating breakdown is provided at the end of the commentary.
The rating actions follow the recent affirmation of Kazakhstan's Long-term
foreign and local currency IDRs at 'BBB-' and 'BBB', respectively (for further
information, see the 5 June 2009 comment, entitled 'Fitch Affirms
Kazakhstan; Off Rating Watch Negative; Assigns Negative Outlook', which is
available on the agency's public website, www.fitchratings.com).
DBK is indirectly owned by the Kazakhstan government (100%-owned by the
government-owned National Welfare Fund Samruk-Kazyna) and is key to the
government's strategic development efforts. As such, and given the
authorities' ability to provide support, Fitch believes that there is a high
probability of state support, if required. The Negative Outlooks assigned to
DBK's Long-term foreign and local currency IDRs reflect the Negative
Outlooks on the corresponding ratings of the sovereign.
ATF Bank's IDRs and Support Rating are driven by potential support from
UniCredito Italiano (UCI, rated 'A'/'F1'/Negative). Given UCI's ability and
propensity to provide support, Fitch believes there is a high probability that
support would be forthcoming, if required. ATF's Individual Rating reflects the
bank's rapidly weakening asset quality and its potential further deterioration
due to high borrower concentrations and its exposure to the construction/real
estate sectors, as well as the increasingly challenging credit environment. In
addition, Fitch notes ATF's moderate loss absorption capacity and
capitalisation relative to the bank's risk profile. However, the agency also
takes into account recent improvements in risk management and access to
funding following ATF's acquisition by UCI.
At the same time, the Long-term IDR of 'BB+' of Kazakh development finance
institution Kazagrofinance (KAF) remains on RWN. KAF's ratings are driven
by the potential of government support, in case of need, given its ownership
and the national importance of the agriculture industry in Kazakhstan. Fitch
will resolve the RWN after reassessing the likelihood of government support
for KAF in light of the recent defaults of other companies in the financial
sector, namely BTA Bank, Alliance Bank and Astana Finance, of which are
rated 'RD' (Restricted Default).
The rating actions are as follows:
Development Bank of Kazakhstan
Long-term foreign currency IDR: affirmed at 'BBB-'; removed from RWN;
assigned a Negative Outlook
Long-term local currency IDR: affirmed at 'BBB'; removed from RWN,
assigned a Negative Outlook
Short-term foreign currency IDR: affirmed at 'F3'; removed from RWN
Short-term local currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'; removed from RWN
Support Rating Floor: affirmed at 'BBB-'; removed from RWN
Senior unsecured debt: affirmed at 'BBB-'; removed from RWN
ATF Bank
Long-term foreign currency IDR: affirmed at 'BBB'; removed from RWN,
assigned a Negative Outlook
Short-term foreign currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Individual Rating: affirmed at 'D/E'
Senior unsecured debt: affirmed at 'BBB'; removed from RWN
KAF's present ratings are as follows:
KazAgroFinance
Long-term foreign currency IDR: 'BB+'; RWN
Long-term local currency IDR: 'BBB-'; RWN
Short-term foreign currency IDR: 'B'
National Long-term rating: 'AA(kaz)'; Outlook Stable
Support Rating: '3'
Support Rating Floor: 'BB+'; RWN
Contact:
James Watson, Alexei Kechko, Moscow, tel.: +4 795 956 9901
Media Relations:
Marina Moshkina, Moscow, tel.: + 7 495 956 6904/9901,
marina.moshkina@fitchratings.com
[2009-06-16]