Baku, Azerbaijan, March 3
By Elena Kosolapova- Trend:
Ratings of Standard & Poor's Ratings Services on Kazakh Halyk Savings Bank (BB/Stable/B) are unaffected following the announcement by the bank that it is acquiring HSBC Bank Kazakhstan, the rating agency reported on March 3.
"The impact of the acquisition on Halyk's creditworthiness is moderate, in our view, given HSBC Bank Kazakhstan's small size compared to Halyk," the rating agency said.
HSBC Bank Kazakhstan's gross loans and total assets at year-end 2013 were only 5 percent and 8 percent, respectively, those of Halyk, according to S&P.
"This transaction strengthens Halyk's competitive position in the Kazakh banking sector, especially in view of close competitor 's plan to acquire BTA Bank. It will also expand Halyk's payroll and trade finance product lines," S&P said.
HSBC Bank Kazakhstan has stronger capitalization and profitability than the Kazakh banking system average, with a regulatory Tier 1 capital adequacy ratio of 12 percent, return on equity of 15.4 percent, and return on assets of 2.1 percent as of Sept. 30, 2013. Its asset quality was also higher than the system average. Loans more than 90 days overdue were 6.6 percent of total assets as of Feb. 1, 2014, according to regulatory data, compared with 16.6 percent for Halyk.
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