S&P assigns ratings to Tsesna-bank (Kazakhstan)

/REUTERS, London, August 15, 05/ - Standard & Poor's Ratings Services said today it assigned its "B-/C" counterparty credit and certificate of deposit ratings to Kazakhstan-based Tsesna Bank. The outlook is stable. "The ratings on Tsesna Bank reflect the bank's small franchise, tight capitalization, aggressive growth, and high individual loan concentrations," said Standard & Poor's credit analyst Annette Ess. Factors supporting the ratings include its fast-developing franchise, good profitability, and continued business and funding diversification. Furthermore, good economic prospects, growing financial intermediation, and solid progress in the legal and regulatory framework in Kazakhstan (foreign currency, BBB-/Stable/A-3; local currency, BBB/Stable/ A-3) benefit the bank's credit profile. Tsesna is a small commercial bank mainly active in north Kazakhstan with total assets of Kazakhstan tenge (KZT) 23 billion ($173 million at KZT133 to $1) at March 31, 2005, which translates into a 1% market share. It is part of the local financial and industrial group Tsesna Corporation, which, together with the group companies, holds a majority stake in the bank. "We expect that the bank will continue to develop its domestic franchise, diversify its business, maintain its good levels of profitability and asset quality, and implement its proposed capital increase," added Ms. Ess. The future prospects of the rating will depend on a reduction in loan concentrations, successful management of growth, continued capital injections by shareholders, further funding diversification, and strengthening liquidity. An increase in problem assets, weakening capitalization, or shrinking profitability could put negative pressure on the ratings. [2005-08-15]