S&P: Kazakh banks vulnerable

Standard & Poor's said its long-standing concerns over the rising debt of banks in Kazakhstan are heightened by tightening liquidity and widening risk premiums due to the recent global credit squeeze.

S&P rates the following Kazakh banks: ATF Bank (B+/WatchPositive/B), Bank TuranAlem (BB/positive/B), BTA Ipoteka Mortgage Co. (BB-/stable/B), Halyk Savings Bank of Kazakhstan (BB+/stable/B), Joint Bank Lariba Bank (B/stable/B), JSC Eurasian Bank (B/positive/B), JSC Nurbank (B/stable/C), KazInvestBank (B/stable/B), Kazkommertsbank (BB+/stable/B), Temirbank JSC (B+/stable/B) and Tsesna Bank (B-/stable/C).

Concerns about Kazakh banks' growing reliance on international investor sentiment is a key rating factor for Kazakh banks in speculative categories even as the sovereign is assigned investment grade levels (foreign currency BBB/stable/A-3; local currency BBB+/stable/A-2), according to the agency.

"Standard & Poor's does not plan to take any immediate rating actions on Kazakh banks as the situation remains manageable and the banks' fundamentals are still good," S&P credit analyst Magar Kouyoumdjian said in a written statement.

"Vulnerability to investor sentiment was already factored into our ratings on Kazakh banks. We will monitor the market closely to see if the capital market trends continue to deteriorate, in particular to see if they start affecting banks' fundamentals and will reassess our position if necessary," he added.

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