Fitch Affirms ATFBank Ratings, Outlook Revised to "Stable"
OREANDA-NEWS. December 23, 2009. Fitch Ratings has revised ATF Bank's (ATF) Outlook to Stable from Negative. Fitch has simultaneously affirmed ATF's Long-term foreign and local currency Issuer Default Ratings (IDRs) at BBB' respectively. The change in Outlook follows the agency's similar rating action with respect to Kazahkstan's Outlook (for further information, please see the 16 December 2009 comment, entitled 'Fitch Revises Kazakhstan's Outlook to Stable; Affirms 'BBB-'', which is available at www.fitchratings.com, reported the press-centre of KASE.
ATF Bank's IDRs and Support Rating of '2' are driven by potential support from the bank's ultimate owner, UniCredit S.p.A. (UC, rated 'A'/'F1'/Negative). Given UC's ability and propensity to provide support, Fitch believes there is a high probability that support would be forthcoming, if required. However, the ability of ATF to utilise this support to meet obligations to creditors may be limited by Kazakhstan transfer and convertibility risks, as reflected in the Country Ceiling of 'BBB'.
ATF's Individual Rating, which Fitch affirmed at 'D/E' today, reflects the bank's weak asset quality and its potential further deterioration due to high borrower concentrations and its exposure to the construction/real estate sectors, as well as the still challenging credit environment. In addition, Fitch notes ATF's moderate loss absorption capacity and capitalisation relative to the bank's risk profile. However, the agency also takes into account some improvements in risk management and better access to funding following ATF's acquisition by UC in 2007.
The rating actions are as follows:
Long-term foreign currency IDR; affirmed at 'BBB'; Outlook revised to Stable from Negative
Short-term foreign currency IDR: affirmed at 'F3'
Long-term local currency IDR: affirmed at 'BBB'; Outlook revised to Stable from Negative
Senior unsecured debt: affirmed at 'BBB'
Support Rating: affirmed at '2'
Individual Rating: affirmed at 'D/E'
National Long-term rating: affirmed at 'AAA(kaz)'; Outlook Stable
National senior unsecured debt rating: affirmed at 'AAA(kaz)'
ATF was the fifth-largest bank in Kazakhstan, holding around 9.7% of system assets, at end-October 2009. It is primarily a corporate bank with 144 outlets, located throughout Kazakhstan. UC has introduced experienced international senior management into ATF to take control of its operations and is bringing ATF's internal procedures in line with the broader UCI group.
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