Moody's cuts three Kazakh banks

Moody's Investors Service said it downgraded the ratings of three Kazakh government-related issuers and confirmed the ratings of two others.

Kazagrofinance's issuer rating was downgraded to Ba1 from Baa3, Agrarian Credit Corp.'s issuer rating to Ba1 from Baa3 and Kazakhstan Mortgage Co.'s issuer rating to Ba2 from Baa3.

Development Bank of Kazakhstan's issuer rating was confirmed at Baa2, and House Construction Savings Bank of Kazakhstan's local-currency deposit rating at Baa3.

The outlook on the five financial institutions is negative, in line with the negative outlook on Kazakhstan's sovereign rating.

These actions conclude a review that began in May, prompted by concerns that ongoing stress in the nation's economy, particularly within its financial sector, might result in the government having to become more selective in allocation of support to its state-owned financial institutions, Moody's said.

The agency said it continues to believe that the Kazakh government will provide support to the government-owned financial institutions given that they pursue special policy mandates and are strategically important to the national economy.

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