Fitch Ratings has confirmed credit ratings of Development Bank of Kazakhstan CJSC on the level of ВВ/positive/В and changed support rating from "4Т" into "3"
28.07.03 00:00
/IRBIS, July 28, 03/ - Development Bank of Kazakhstan CJSC (Astana), whose
bonds are circulating in Kazakhstan stock exchange's (KASE) official "А"
listing category, informed KASE on the past Friday about the fact that on July
22 of 2003 Fitch Ratings Ltd. had confirmed the bank's long-term credit rating
on the level of "ВВ" with positive outlook, short-term - on the level of "В".
Besides, as the bank informs, the agency has upgraded support rating of
Development Bank of Kazakhstan from "4Т" to "3".
While working with the original materials of Fitch Ratings Ltd., which were
published in the agency's official site in the Internet, it was found out that
changing of support rating of Development Bank of Kazakhstan CJSC was not
upgrading in full meaning of the word, but was caused by reexamining of methods
of estimation and the scale of support ratings of banks by Fitch agency. Within
the framework of this work the agency reexamined support ratings of all 1,264
banks, which are examined by Fitch, and, in particular, seven Kazakhstan
banks.
Original message of Fitch Ratings Ltd., which was published in the official
site of the agency concerning this matter, is given below in full volume.
FITCH ANNOUNCES FORMAL LAUNCH OF NEW SUPPORT RATINGS FOR
BANKS
22 Jul 2003 9:00 AM
Fitch Ratings-London/New York-22 July 2003: Fitch Ratings, the international
rating agency, has today formally launched its new Support ratings for all
1,264 banks to which it ascribes such ratings. The new ratings have been
assigned in accordance with April's announcement of the new bank Support rating
methodology. Fitch remains the global market leader in bank ratings, and its
Support ratings are unique to the industry. They are the agency's assessment of
the probability of external support being provided - by either a sovereign
state or an institutional owner - should a bank be in imminent danger of
defaulting.
Essentially, there are two components to this assessment. First, the potential
supporter's ability to provide support is measured in terms of its own Fitch
Long- term debt rating. Second, its willingness to provide support is assessed
on the basis of a number of criteria, including systemic importance, and, in
the case of institutional support, strategic significance and potential
reputation risk. An important feature of the new Support ratings is that they
are explicitly linked to the familiar Long-term debt ratings by means of rating
"floors", e.g. the Long-term debt rating of a bank, whose Support rating is
1', should not fall below 'A-' (A minus). As before, the assessment of the
intrinsic stand-alone credit quality of a bank is indicated by Fitch's
Individual ratings, first introduced to the market in 1980.
Fitch has today posted to its website a list of banks, showing their Support
ratings under both the new and the previous methodologies. This is available
free of charge on www.fitchratings.com by selecting 'Sectors'/'Banks and
Securities Firms'/'New Support Ratings List'.
In making today's announcement, Gerry Rawcliffe, a managing director within the
Financial Institutions group, commented that "Fitch's track record in analyzing
bank support is very strong. The new methodology builds on that. It enhances
transparency, and, by means of explicit Long-term rating floors, adds value, in
particular to the capital markets, which will now have a clear opinion on the
scale of the down-side risk they face." It should be stressed that, although
the old and the new ratings are designated in terms of the same numeric scale
(1-5), the new Support ratings are based on a revised methodology and new
rating definitions. It is, therefore, incorrect to refer to Support ratings
having been raised or lowered as a result of this process, and a movement from
one category to another does not imply a shift in Fitch's fundamental view of
the likelihood of support for any given bank nor of its actual
creditworthiness. Thus, the introduction of the new methodology has not
resulted in changes to our Long- and Short-term debt ratings of banks.
A criteria report backing today's announcement, which includes the new rating
definitions, is also available on www.fitchratings.com by selecting
Sectors'/'Banks and Securities Firms'/'Criteria Reports'. The report also
includes an analysis of the migration from the old ratings to the new.
Fitch Ratings' Individual and Support ratings are assigned to banks that are
legal entities. The agency notes that the term "banks" includes bank holding
companies and bancassurance holding companies, bancassurance companies
operating as single legal entities, investment banks and private banks. These
ratings are not assigned to insurance companies even if these form part of a
bancassurance group. Individuals and families who own banks are not taken into
account in Fitch's Support ratings criteria. It is the agency's opinion that
their motivation is likely to be ruled by sentiment and the instinct of
self-preservation and therefore their propensity to provide support is
impossible to predict. Further, their ability to support cannot usually be
assessed. Thus, unless there is a possibility of support from the state, banks
with such ownership are assigned the lowest Support rating.
Contact: David Andrews, London, Tel: +44(0)20 7417 4302 Gerry Rawcliffe,
London, Tel: +44(0)20 7862 4019 Fred Puorro, New York, Tel: +1 212 908 0356
Media Relations: Campbell McIlroy +44 20 7417 4327, London
[2003-07-28]