S&P: Kazkommertsbank on watch

S&P said it placed the B- long-term and B short-term counterparty credit ratings and kzB+ Kazakhstan national scale ratings on Kazkommertsbank JSC on CreditWatch with negative implications.

The CreditWatch placement reflects a view that the bank could need a capital injection to address its under-provisioning even though the Kazakh authorities have committed to provide substantial bad asset and liquidity support, S&P said.

The agency said it does not see the bank's current financial position as sustainable in the long term.

While the base case remains that the bank will receive solvency support to restore its capital to regulatory adequate levels after additional provisioning, S&P said it has doubts about the source and timing of such support.

The bank's liquidity is considered adequate despite a low liquidity cushion of about 5% of total assets as of year-end April 2017 and its apparent inability to issue in the wholesale market, the agency said.

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