Fitch Affirms Temirbank Ratings
OREANDA-NEWS. July 22, 2011. Fitch Ratings has affirmed Kazakh Temirbank's (Temir) ratings, including its Long-term Issuer Default Rating (IDR) at 'B-' with a Stable Outlook. At the same time, the agency has withdrawn the ratings as the bank has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, the agency will no longer provide ratings or analytical coverage of Temir. A full list of ratings actions is at the end of this comment, reported the press-centre of KASE.
The affirmations reflect the fact that there have been only moderate changes to the bank's credit profile in recent months, and Fitch anticipates that the profile is unlikely to change materially in the foreseeable future. Rating constraints include the challenges in establishing a viable business model and sustainable franchise, and the lack of track record following the restructuring of the bank's debt in 2010. At the same time, the ratings are underpinned by ultimate state ownership and the financial flexibility offered by a relatively long-term funding profile.
Fitch notes that Temir's Individual Rating of 'D/E' is higher than that of the other two Kazakh banks, which defaulted and restructured debt in 2009-2010, namely BTA Bank and Alliance bank (both rated 'B-'/Stable, Individual 'E'). This is mainly due to a somewhat lower amount of legacy problems and generally stronger balance sheet as reflected in positive equity both under IFRS and local GAAP and positive performance in recent months.
At the same time, the still high share of problem assets and significant operating expenses weigh heavily on Temir's bottom line. Accrued interest, which formed a large 37% of interest income in 5M11 and on the balance sheet equated to a high 1.2x equity under local GAAP at end-May 11, undermines the quality of capital and profits. The bank has not been able to increase its loan book. Deposits grew modestly in 5M11, which is broadly in line with the generally stagnant sector. In the absence of business expansion, performance is likely to remain depressed.
Temir defaulted in 2009, mainly because of the high level of problem loans and liquidity squeezed by deposit outflows.
The following ratings have been affirmed and withdrawn:
Long-term foreign currency IDR: affirmed at 'B-'; Outlook Stable; withdrawn
Long-term local currency IDR: affirmed at 'B-'; Outlook Stable; withdrawn
Short-term foreign currency IDR: affirmed at 'B'; withdrawn
Short-term local currency IDR: affirmed at 'B'; withdrawn
Individual Rating: affirmed at 'D/E'; withdrawn
Support Rating: affirmed at '5'; withdrawn
Support Rating Floor: affirmed at 'No Floor; withdrawn
Senior unsecured debt: affirmed at 'B-'; Recovery Rating at 'RR4'; withdrawn.
Комментарии