Fitch raises Kazkommertsbank

Fitch Ratings upgraded Kazkommertsbank's long-term rating to BB from BB-.

Fitch said the action reflects Kazkommertsbank's continued development of a universal banking franchise as reflected in its increased activity in the retail and SME markets.

The ratings also reflect the bank's track record of good profitability and risk management and maintenance of an adequate level of capital.

But Fitch's assessment also takes into account the exposure the bank necessarily has to a volatile operating environment and the level of concentration in customer lending and funding. The operating environment is, however, gradually improving and concentration is falling.

Expansion into SME and retail markets exposes the bank to new potential risks, but also brings a welcome diversification to its earnings base. Importantly, the expansion of the bank into a more universal franchise, in Fitch's view, increases the likelihood that support from the Kazakhstani authorities will be forthcoming in case of need.

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