Fitch upgrades seven Kazakhstani banks on sovereign upgrade
21.12.05 11:23
/REUTERS, December 21, 05/ - Fitch Ratings-London/Moscow-20
December 2005: Fitch Ratings has today upgraded seven Kazakhstani
banks (listed below), following its upgrade of Kazakhstan's foreign currency
Issuer Default Rating to 'BBB' from 'BBB-' (BBB minus) and local currency
Issuer Default Rating to 'BBB+' from 'BBB' (see separate announcement on
www.fitchratings.com).
Development Bank of Kazakhstan ("DBK"):
Upgraded to Long-term foreign currency 'BBB' from 'BBB-' (BBB minus) and
to Long-term local currency 'BBB+' from 'BBB'. All outstanding rated senior
unsecured foreign currency debt also upgraded to Long-term 'BBB' from
BBB-' (BBB minus). Short-term local currency rating assigned at 'F2'. Short-
term foreign currency and Support ratings affirmed at 'F3' and '2',
respectively. Outlooks on the Long-term ratings remain Stable.
Kazkommertsbank ("KKB"), Bank TuranAlem ("BTA"), Halyk Bank ("Halyk"):
Upgraded to Long-term foreign currency 'BB+' from 'BB' and to Long-term
local currency 'BBB-' (BBB minus) from 'BB+'. All outstanding rated senior
unsecured foreign currency debt issues also upgraded to Long-term 'BB+'
from 'BB'. Short-term local currency rating assigned at 'F3'. Short-term
foreign currency and Support ratings affirmed at 'B' and '3', respectively.
Individual ratings are at 'C/D'. Outlooks on the Long-term ratings are Stable.
KKB's USD200 million subordinated loan participation notes due 2014 are
upgraded to Long-term 'BB' from 'BB-' (BB minus). KKB's USD100m limited
recourse perpetual loan participation notes are affirmed at Long-term 'B+'.
ATF Bank ("ATF"), Alliance Bank ("Alliance"), Bank CenterCredit ("BCC"):
Upgraded to Long-term 'BB-' (BB minus) from 'B+' and to Support '3' from '4'.
All outstanding rated senior unsecured foreign currency debt issues also
upgraded to Long-term 'BB-' (BB minus) from 'B+'. Short-term foreign
currency ratings affirmed at 'B'. Individual ratings are at 'D'. Outlooks on
the Long-term ratings are Stable.
The rating actions reflect Fitch's view of the Kazakhstani authorities'
improved capacity and moderate to very strong propensity to support these
banks, if required. The improved capacity is reflected in the upgrade of the
sovereign Issuer Default Ratings.
DBK's Long-term, Short-term and Support ratings reflect Fitch's view of the
very strong propensity of the Kazakhstani authorities to provide support to
the bank in case of need, based on its status, state ownership and the
bank's objective to promote the development of the local economy.
The ratings of KKB, BTA and Halyk reflect Fitch's view of the strong
propensity of the Kazakhstani authorities to provide support to these banks
in case of need, based on their importance to the country's banking system
and considerable market shares. At the same time, Fitch notes that, given its
current view of the authorities' propensity to provide support to these banks,
upward potential for the support floors of their Long-term ratings is capped at
BBB-' (BBB minus).
The ratings of ATF, Alliance and BCC reflect Fitch's view of the moderate
propensity of the Kazakhstani authorities to provide support to the banks in
case of need, based on their growing market shares. At the same time, Fitch
notes that, given its current view of the authorities' propensity to provide
support to these banks, upward potential for the support floors of their Long-
term ratings is capped at 'BB-' (BB minus).
DBK was established in 2001 as a 100% state-owned company with the
objective to foster Kazakhstan's economic development by providing
medium- to long-term financing for infrastructure and production sector
projects, and by issuing pre-export loans and guarantees. At 1 July 2005,
approximately 87% of the bank's shares were held by the government of
Kazakhstan, with 13% equally distributed among the local government
bodies of 14 regions and the cities of Almaty and Astana.
KKB, BTA and Halyk were the three largest commercial banks in
Kazakhstan by assets at end-H105 (market shares of around 22%, 21% and
15%, respectively) and have top three positions in all major market
segments. ATF, Alliance and BCC were the three next largest commercial
banks in Kazakhstan by assets at end-H105 (market shares of around 8%,
7% and 7%, respectively).
[2005-12-21]