Fitch confirmed the ratings of five banks of Kazakhstan
12 April 2019

About this agency reported on Tuesday, December 11

Fitch Ratings has affirmed the long-term Issuer Default Ratings (IDR) of a subsidiary bank of Sberbank JSC at the BB + level, Halyk Bank JSC (Halyk Bank) and Halyk Finance JSC at the BB level. The rating outlook is “Positive”. In addition, Fitch confirmed the IDR of ForteBank, ATFBank and CenterCredit Bank (“BCC”) at the level “B” with a “Stable” outlook.

At the same time, the agency lowered the stability ratings of ATFBank and BCC from “b” to “ccc”.

“The downgrade of the stability ratings of BCC and ATFBank from“ b ”to“ ccc ”reflects the persistently high net impaired loans and non-core assets, and this may require both banks to absorb additional impairment losses. According to Fitch, the settlement of these risks is likely to require external capital support and / or the potential write-off of junior creditors, since the profitability before deductions to reserves for loan impairment of both banks remains weak and the stock of capital stock is insufficient to absorb potentially high losses. ” , - said the agency.

Fitch Ratings explains: the stability ratings of BCC and ATFBank are “due to poor asset quality and poor ability to absorb losses. At the end of 1 half of 2018, the impaired loans from BCC and ATFBank were at the level of 31% and 22% of gross loans, respectively, and 37% and 88% were covered by total reserves for loan losses. Stage 2 loans from banks were also significant at the level of 11.5% (BCC) and 27% (ATFBank) of gross loans, and they may require additional provisions for both banks. ”

According to Fitch, the profits of both banks may be insufficient to absorb potential additional impairment losses associated with the above-mentioned non-performing assets, and “a significant improvement in their profitability is unlikely in the near term.”

ATFBank commented on the decision of the rating agency.