03.12.2007, 04:59
Standard & Poor's Affirms Its Ratings on Tsesnabank of Kazakhstan
OREANDA-NEWS. December 1, 2007. In the middle of November, Standard & Poor's Rating Agency published its full rating report, whereby it affirmed credit ratings on Tsesnabank: Counterparty credit ratings and Certificate of deposit on the level of “B-/C”, Stable Outlook, the bank's press service reported.
Standard & Poor’s pointed out the following credit strengths factors for Tsesnabank, which are its fast-developing franchise particularly in North Kazakhstan, shareholder support through capital increases, and continued business and funding diversification.
Standard & Poor’s positively views the implementation of the Bank’s strategy of focusing on SME and retail customers in North Kazakhstan and expanding its franchise countrywide.
The impact of the recent global liquidity squeeze on the Bank has been much less than at larger Kazakh banks due to Tsesnabank’s lower share of international wholesale financing (the rate of foreign borrowings in the total liabilities amounts to around 25% if compared to the average external debt of Kazakhstan banking sector, which exceeds 40%) and its considerably low level of business concentration in the Southern Kazakhstan, especially in Almaty, where the major share of loan and deposit base of the whole country is allocated.
Furthermore, Standard & Poor’s commented on Tsesnabank’s loan portfolio, which has demonstrated good performance to date, but have yet to be tested under adverse economic conditions. Standard & Poor's takes comfort from the fact that the majority of loans, including consumer loans, are collateralized and/or guaranteed.
Any potential Standard & Poor’s ratings upgrade will depend on market stabilization, as well as on the management’s ability to control asset quality, improve profitability and maintain current levels of capitalization. Ongoing improvements in risk management, and the introduction of a wider range of methods for measuring and managing market risks are essential in light of the Bank's ambitious domestic growth plans.
Established in 1992, with branch network comprising 78 full-service branches and outlets throughout Kazakhstan, Tsesnabank is the only commercial bank headquartered in Astana, the capital of Kazakhstan. As of November 1, 2007 its total assets exceed $1 billion and total shareholders’ equity amounts to $126 million. Further to its devised strategy, the bank will continue to gain a larger market share by expanding its products range and enhancing the quality of services.
Standard & Poor’s pointed out the following credit strengths factors for Tsesnabank, which are its fast-developing franchise particularly in North Kazakhstan, shareholder support through capital increases, and continued business and funding diversification.
Standard & Poor’s positively views the implementation of the Bank’s strategy of focusing on SME and retail customers in North Kazakhstan and expanding its franchise countrywide.
The impact of the recent global liquidity squeeze on the Bank has been much less than at larger Kazakh banks due to Tsesnabank’s lower share of international wholesale financing (the rate of foreign borrowings in the total liabilities amounts to around 25% if compared to the average external debt of Kazakhstan banking sector, which exceeds 40%) and its considerably low level of business concentration in the Southern Kazakhstan, especially in Almaty, where the major share of loan and deposit base of the whole country is allocated.
Furthermore, Standard & Poor’s commented on Tsesnabank’s loan portfolio, which has demonstrated good performance to date, but have yet to be tested under adverse economic conditions. Standard & Poor's takes comfort from the fact that the majority of loans, including consumer loans, are collateralized and/or guaranteed.
Any potential Standard & Poor’s ratings upgrade will depend on market stabilization, as well as on the management’s ability to control asset quality, improve profitability and maintain current levels of capitalization. Ongoing improvements in risk management, and the introduction of a wider range of methods for measuring and managing market risks are essential in light of the Bank's ambitious domestic growth plans.
Established in 1992, with branch network comprising 78 full-service branches and outlets throughout Kazakhstan, Tsesnabank is the only commercial bank headquartered in Astana, the capital of Kazakhstan. As of November 1, 2007 its total assets exceed $1 billion and total shareholders’ equity amounts to $126 million. Further to its devised strategy, the bank will continue to gain a larger market share by expanding its products range and enhancing the quality of services.
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