OREANDA-NEWS. October 17, 2011. Standard & Poor's Ratings Services said that it had assigned its 'kzBB+' Kazakhstan national scale rating to Kazakhstan-based JSC AsiaCredit Bank. This assignment does not affect the 'B/B' long- and short-term ratings and the stable outlook already in place on AsiaCredit, reported the press-centre of KASE.

The assignment of the national scale rating reflects our view of the bank's small domestic franchise, high credit risk, high individual loan concentrations, weak profitability, and aggressive growth plans.

The ratings benefit from our view of AsiaCredit Bank's moderate capital leverage (enhanced by a large capital increase), lack of reliance on foreign borrowing, and adequate share of liquid assets.

Further supporting factors include a robust economic recovery in the Republic of Kazakhstan (foreign currency BBB/Stable/A-3; local currency BBB+/Stable/A-2; Kazakhstan national scale rating 'kzAAA') and stabilizing operating conditions in the domestic banking sector.

The stable outlook reflects our view that the external pressure on the bank's financial and business profile is declining and our expectation that the bank  will gradually clean its credit portfolio, continue managing its funding and liquidity position adequately, and maintain sufficient capitalization.

If we observe further escalation in market turbulence that leads to a reversal of this trend, we could revise the outlook to negative, with the potential for a downgrade. We consider this scenario unlikely, however. The ratings could be lowered if the bank's planned aggressive growth strategy is not supported by adequate capitalization, sound management, and new operating processes.

Ratings upside is limited over the short term and would require a stronger market position and franchise, greater business diversity, further improvements in risk management, a sustained adequate financial performance, and improved asset quality.