S&P assigns "kzBB+" to AsiaCredit Bank (Kazakhstan) on national scale
11.10.11 16:04
/Standard & Poor's, Moscow, October 10, 11, heading by KASE/ - Standard & Poor's
Ratings Services said today that it had assigned its 'kzBB+' Kazakhstan national
scale rating to Kazakhstan-based JSC AsiaCredit Bank. This assignment does not
affect the 'B/B' long- and short-term ratings and the stable outlook already in
place on AsiaCredit.
The assignment of the national scale rating reflects our view of the bank's
small domestic franchise, high credit risk, high individual loan concentrations,
weak profitability, and aggressive growth plans.
The ratings benefit from our view of AsiaCredit Bank's moderate capital leverage
(enhanced by a large capital increase), lack of reliance on foreign borrowing,
and adequate share of liquid assets.
Further supporting factors include a robust economic recovery in the Republic of
Kazakhstan (foreign currency BBB/Stable/A-3; local currency BBB+/Stable/A-2;
Kazakhstan national scale rating 'kzAAA') and stabilizing operating conditions
in the domestic banking sector.
The stable outlook reflects our view that the external pressure on the bank's
financial and business profile is declining and our expectation that the bank
will gradually clean its credit portfolio, continue managing its funding and
liquidity position adequately, and maintain sufficient capitalization.
If we observe further escalation in market turbulence that leads to a reversal
of this trend, we could revise the outlook to negative, with the potential for a
downgrade. We consider this scenario unlikely, however. The ratings could be
lowered if the bank's planned aggressive growth strategy is not supported by
adequate capitalization, sound management, and new operating processes.
Ratings upside is limited over the short term and would require a stronger
market position and franchise, greater business diversity, further improvements
in risk management, a sustained adequate financial performance, and improved
asset quality.
Analysts:
Natalia Yalovskaya, Moscow, 7 495 783 40 97
natalia_yalovskaya@standardandpoors.com
Annette Ess, Frankfurt, 49 693 399 91 57
annette_ess@standardandpoors.com
[2011-10-11]