Fitch: Outlook negative for two Kazakh banks

Fitch Ratings said it affirmed the ratings of Development Bank of Kazakhstan and ATF Bank, removed those ratings from Rating Watch negative and assigned a negative outlook.

The agency affirmed Development Bank of Kazakhstan's long-term foreign-currency issuer default rating, senior unsecured debt and support rating floor at BBB-, long-term local-currency issuer default rating at BBB, short-term foreign- and local-currency issuer default ratings at F3 and support rating at 2.

Fitch affirmed ATF Bank's long-term foreign-currency issuer default rating and senior unsecured debt at BBB, individual rating at D/E, short-term foreign-currency issuer default rating at F3 and support rating at 2.

The rating actions follow the affirmation of Kazakhstan's long-term foreign- and local-currency issuer default ratings at BBB- and BBB, respectively.

Development Bank of Kazakhstan is indirectly owned by the Kazakhstan government, and Fitch believes there is a high probability of state support if required. The negative outlook on the bank reflects the negative outlook on the sovereign.

The agency said ATF Bank's ratings are driven by potential support from UniCredito Italiano (A/F1/negative) but also reflect the bank's rapidly weakening asset quality, potential further deterioration due to high borrower concentrations and exposure to the construction/real estate sectors as well as the increasingly challenging credit environment.

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