OREANDA-NEWS. On February 09, 2009 Moody's Investors Service has downgraded the long-term bank deposit and unsecured debt ratings of Temirbank to B2 from Ba3. At the same time E+ bank financial strength rating ("BFSR") was lowered to E. The bank's not Prime short-term ratings were affirmed. Its debt and deposit ratings remain on review for possible further downgrade, reported the press-centre of KASE. 

Moody's said that the downgrade of Temirbank's long-term deposit and debt ratings has, in turn, been prompted by the lowering of the bank's BFSR by one notch from E+ to E.

According to Moody's, the lowering of Temirbank's BFSR - which now maps to a Baseline Credit Assessment of Caa1 compared to B2 previously - reflects the continuing rapid weakening of the bank's liquidity profile along with a high reliance on the foreign currency wholesale funding and the limited access for refinancing. "In addition, the deterioration of the operating environment in Kazakhstan - leading to continuing asset quality erosion, increasing FX risks and a decline in the bank's working assets - all together, adversely affect the bank cash flow profile and overall financial fundamentals including capital and profitability, in particular", says Semyon Isakov, a Moscow-based Moody's Analyst and lead analyst for this issuer.

In addition, Moody's also notes that in March 2009 Temirbank is scheduled to repay a US150 million Eurobond that - amid the devaluation of the local currency against the US dollar and tight liquidity position of the bank - renders the bank liquidity profile highly vulnerable.

Moody's also notes that Temirbank's ratings currently continue to benefit from the existing shareholder support from its controlling parent BTA Bank, as a result of which it enjoy a two-notch uplift from the bank's Baseline Credit Assessment.

At the same time, Temirbank's long-term deposit and unsecured debt ratings remain on the review for possible further downgrade, that reflects both the bank's weakening standalone financial profile as well as the high degree of uncertainty with regard to the shareholder support incorporated in the bank's rating.

Moody's also says that debt and deposit ratings of Temirbank's parent, BTA Bank, currently are on review for possible downgrade, and therefore, if BTA Bank were to be downgraded there is also a high likelihood of a corresponding downgrade on Temirbank's ratings. In addition, the clearer position of Samruk-Kazyna - the controlling shareholder of the new BTA Bank - with regard to Temirbank, may also affect the latter's long-term debt and deposit ratings.

Moody's previous rating action on Temirbank was on 12 December 2008 when the long-term debt and deposit ratings were placed on review for possible downgrade.

The principal methodologies used in rating the issuer - Temirbank – are "Bank Financial Strength Ratings: Global Methodology" and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating can also be found in the Credit Policy & Methodologies directory.

Headquartered in Almaty, Kazakhstan, Temirbank is the eighth-largest bank in the country by total assets, and at end-June 2008 reported IFRS total assets of KZT321 billion (US2.7 billion).