Moody's: Kazakh banks at risk

Kazakh banks are among the largest issuers of emerging market debt and are therefore vulnerable to deteriorating international investor sentiment, Moody's Investors Service said in a report.

If credit markets were to tighten for an extended period of time, it would raise concerns about the refinancing risk faced by those Kazakh banks funded by external borrowing, the agency said.

The ratings for Kazakh banks already incorporate a moderate degree of refinancing risk but the Kazakh banking system appears to enjoy a strong liquidity cushion in the short term, Moody's said.

"However, if global debt markets were to display a severe tightening over an extended period and Kazakh banks failed to take appropriate measures to manage their liquidity accordingly, negative pressure on selected banks' ratings might ensue," Armen Dallakyan, a Moody's analyst and author of the report, said in a written statement.

Moody's said it would continue to monitor the refinancing risk of Kazakh banks and their effectiveness at extending or refinancing their maturing debt in the coming months.

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