Fitch revises outlook for some Kazakh banks

Fitch Ratings said it revised Halyk Bank's and Bank CenterCredit's outlooks to stable from negative and evolving, respectively, and maintained Kazkommertsbank's negative outlook.

The ratings of each bank were affirmed, including Halyk Bank's B+ long-term foreign- and local-currency issuer default ratings and B+/RR4 senior unsecured debt rating; Kazkommertsbank's B- long-term foreign- and local-currency issuer default ratings, B-/RR4 senior unsecured debt rating and CC/RR6 subordinated debt and tier 1 perpetual subordinated note ratings; and Bank Centercredit's B long-term foreign- and local-currency issuer default ratings and B/RR4 senior unsecured debt rating.

The agency said the outlook revisions reflect the banks' now solid (Halyk) and reasonable (Bank CenterCredit) loss-absorption capacity compared to credit risks faced and potential further loan impairment recognition. The outlooks also reflect the more positive outlook for the Kazakh economy, which makes further substantial deterioration in these banks' asset quality less likely, in Fitch's view.

The negative outlook on Kazkommertsbank reflects the still very high credit risks faced by the bank and the potential for eventual loan impairment recognition to exceed the bank's loss-absorption capacity, Fitch said, adding that a higher share of foreign funding relative to peers is also a concern.

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