Fitch cuts Kazkommertsbank to BB

Fitch Ratings said it downgraded Kazkommertsbank's long-term foreign-currency issuer default rating to BB from BB+, long-term local-currency issuer default rating to BB from BBB-, short-term local-currency issuer default rating to B from F3, senior unsecured debt to BB from BB+, subordinated debt to BB- from BB and tier 1 perpetual subordinated notes to B- from B+. The short-term foreign-currency issuer default rating was affirmed at B.

Kazkommertsbank's wholly owned subsidiary Moskommertsbank's long-term foreign-currency issuer default rating also was downgraded to B from B+ and national long-term rating to BBB-(rus) from A-(rus). Its short-term foreign-currency issuer default rating was affirmed at B.

The outlook remains negative.

The downgrade reflects the reduced ability of the Kazakh authorities to provide support to the bank, as reflected in the downgrade of the sovereign ratings, Fitch said.

The downgrade also reflects deepening concerns over asset quality as loan impairments rapidly increase and as economic prospects are impacted by likely global recession, lower oil prices and a sustained near-closure of capital markets leading to sharply lower credit growth, the agency added.

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