OREANDA-NEWS. January 31, 2012. Standard & Poor's Ratings Services assigned its 'kzBBB' Kazakhstan national scale rating to JSC SB Alfa-Bank (ABK), reported the press-centre of KASE.

As stated in the message, the rating on ABK reflects the 'bb-' anchor for banks operating in Kazakhstan, S&P's view of the bank's weaker business and risk positions than the system average, neutral capital and earnings, and neutral funding and liquidity.

ABK's business position is a negative rating factor. It reflects a balance between its small domestic operations, concentrated in banking for small and midsize enterprises and corporate banking, and execution risks related to its fast growth strategy. Nevertheless, ABK benefits from operational, managerial, product, and funding support it receives from its Russian parent   (BB/Stable/B, Russia National Scale 'ruAA') as well as the latter's strong brand name.

The Agency's neutral assessment of capital and earnings reflects a weakening of the risk-adjusted capital ratio (RAC) before adjustments  to about 5.6%-6.0% over the next 18-24 months. The projection incorporates higher-than-system-average loan growth, a USD 30 million capital injection in the first half of 2012, and no dividend payments on common shares. The bank's enterprise risk management was developed on the basis of Alfa Group. S&P views its risk management capacity as better than that of midsize Kazakh banks. Senior management knows its customers well and is highly aware of the risks  facing the bank.

S&P expects the bank will retain its high lending concentrations, with the share of the top 20 borrowers accounting for 2.4x of adjusted total capital on Sept. 30, 2011.

The rating on AKB reflects the view of S&P of its moderately strategic importance to its parent Alfa-Bank and the likelihood of group support, despite ABK's relatively small contribution to the group. This also reflects a mixed track record of Alfa Group supporting its financial subsidiaries during the latest financial crisis. ABK is wholly owned by Alfa-Bank and benefits from an expected capital increase in 2012, a funding line, provision of subordinated debt, buyout of nonperforming loans, as well as managerial, operational, and risk management support.