Fitch has today affirmed the ratings of AMB, outlook is stable

02.10.02 00:00
/REUTERS, London, October 2, 02/ - On Wednesday International rating agency Fitch affirmed ratings of Kazakhstan AMB (before it was called Alma- ata trade-financial bank): long-term on the level "B", individual "D" and support rating "5ΠΆ". Outlook of change of long-term ratings is "stable". Below is the text of the message, which was distributed by Fitch (in English): LONDON, Oct 2 - Fitch Ratings, the international rating agency, has today affirmed the ratings of ATF Bank (ATF), formerly known as Almaty Merchant Bank, as follows: Long-term 'B', Short-term 'B', Individual 'D' and Support 5T'. The Outlook for the Long-term rating is Stable. The ratings reflect the bank's well-diversified income streams and its adequate profitability. Changes were made to the bank's top management early in 2002, but thus far, business volumes do not appear to have been adversely affected, although the full effect might not yet have been felt. However, Fitch has concerns regarding credit and other risk management issues in view of the bank's rapid asset growth, its only moderate capitalisation, and the high degree of funding concentration. Additionally, the agency views the level of general loan loss reserves (LLR) at ATF to be low, particularly in light of an apparent deterioration in asset quality in 1H02 and the inherent risk of lending in a country as volatile as Kazakhstan. However, despite a significant increase in impaired loans in 1H02, the specific LLR cover of impaired loans, although lower, remained acceptable and actual loan losses have been low. In 2001, the gross loan portfolio grew very rapidly, mostly towards the end of the year, requiring significant use of the interbank market for funding. The growth in the loan book stemmed primarily from new loans issued to several new large clients. In 1H02, loan growth has slowed and customer funding (albeit mainly derived from a few large deposits) has increased, resulting in less reliance on interbank funding. ATF is the fourth largest bank in Kazakhstan by assets. However, in a banking sector dominated by three banks, it held only 5% of the system's assets at end-2001. It services the borrowing, foreign exchange and settlement needs of a diverse range of domestic corporates (both SMEs and larger companies), and has grown its retail business. Since August 2001, ATF has acquired Kazprombank and Apogei Bank, both small regional banks in Kazakhstan. Similar acquisitions are likely in the future. In January 2002, four members of senior management, including the chairman, left the bank to join Halyk Savings Bank, although the former chairman remains chairman of the board of directors. [2002-10-02]