S&P cuts Kazkommertsbank

S&P said it lowered to CCC+ from B- its long-term counterparty credit rating on Kazkommertsbank JSC.

At the same time, S&P lowered the Kazakhstan national scale rating to kzB- from kzBB- and affirmed the C short-term rating on KKB. The outlook is negative.

At the same time, S&P lowered the rating on the subordinated debt of the bank to CCC- from CCC and on the junior subordinated debt to CC from CCC-.

S&P said the downgrade reflects its view that KKB is experiencing increasing pressure from a combination of external and internal factors.

“The bank’s liquidity and capitalization ratios suggest that its short-term (under one year) prospects remain assured. However, we think that KKB is increasingly vulnerable in the long term, as shown by a loss the bank made in 2015 (despite the transfer of nonperforming assets to BTA),” S&P said in a news release. “Additionally, the operating environment is likely to remain weak, and we have seen no clear progress from management in setting out a credible strategy to ensure the bank's long-term health.”

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