OREANDA-NEWS. November 20, 2007. Standard & Poor's Ratings Services said that it raised its long-term counterparty credit rating on Kazakhstan-based ATF Bank to 'BB+' from 'B+'. The outlook is stable.

The rating was also removed from CreditWatch with positive implications, where it had been placed on June 22, 2007.

At the same time, the 'B' short-term rating was affirmed.

"The upgrade follows the acquisition by UniCredito Italiano of a 91,8 % stake in ATF Bank, through subsidiary Bank Austria Creditanstalt," said Standard & Poor's credit analyst Ekaterina Trofimova. "ATF stands to benefit from this transaction in terms of financial flexibility, funding, capital, and risk management."

We consider ATF to be a strategically important subsidiary of UniCredito (UniCredito Italiano SpA and Bank Austria Creditanstalt AG, both rated A+/Stable/A-1) and expect strong parental support in case of need. The long-term rating on ATF consequently includes a three-notch uplift from its stand-alone credit quality. UniCredito has launched a mandatory tender offer for the remaining ATF shares, aiming to ultimately take full ownership.

The ratings reflect ATF's risky operating environment, high funding and lending concentrations, low capitalization, and operational and cultural transformation challenges related to its integration process with UniCredito.

These weaknesses are somewhat offset by support from the new parent, ATF's good domestic commercial franchise, a dynamic and competent management team, and adequate risk management.

With consolidated assets of Kazakhstani tenge (KZT) 961 billion ($7,9 billion) and a market share of 8,5% in banking system assets at June 30, 2007, ATF is the largest foreign-owned bank in Kazakhstan and ranks among the top five domestic banks.

"We expect that the new, strong, and committed parent will benefit ATF and enable the bank to minimize the impact of current turbulence in the Kazakh banking market," added Ms. Trofimova. "Leveraging on its good local knowledge, strong recognition, and parent support, ATF is well-positioned to weather ongoing turmoil and reap the benefits of a still-promising Kazakh market."

A potential upgrade will depend on improvements in the bank's stand-alone creditworthiness, including the strengthening of its business and financial profiles. On the downside, if the bank fails to gain from its new relationship with UniCredito or their links weaken, the ratings would come under pressure.

Ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. It can also be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search. Alternatively, call one of the following Standard & Poor's numbers: Client Support Europe (44) 20-7176-7176; London Press Office Hotline (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow (7) 495-783-4017.