S&P lowers ratings on Development Bank of Kazakhstan
Baku, Azerbaijan, Feb. 25
By Elena Kosolapova - Trend:
Standard & Poor's (S&P) Ratings Services has lowered its long- and short-term issuer credit ratings on Development Bank of Kazakhstan (DBK) to 'BBB-/A-3' from 'BBB/A-2'.
The outlook on the long-term rating is negative, S&P said Feb. 25.
The rating agency has also lowered its Kazakhstan national scale rating on DBK to 'kzAA' from 'kzAA+'.
The rating action reflects the downgrade of Kazakhstan's rank on Feb. 17, said the message from S&P.
"We equalize our ratings on Development Bank of Kazakhstan with the sovereign ratings because we think that there is an almost certain likelihood that the government would provide timely and sufficient extraordinary support to DBK if needed," said the message.
The rating agency said that DBK has integral link with the government of Kazakhstan, which fully owns DBK through National Management Holding Baiterek. It also noted that DBK plays a critical role as the primary institution mandated to implement the government's economic diversification and industrialization agenda.
S&P analysts believe that DBK will also remain a core institution within the Baiterek Group, accounting for about 60 percent of the group's consolidated assets.
"The negative outlook on DBK mirrors our outlook on the sovereign ratings on Kazakhstan," said the message. "We would likely revise the outlook or raise or lower the ratings on DBK if we took similar rating actions on the sovereign.
"We consider that the likelihood that we could lower the ratings independently from the sovereign ratings is low," said the S&P. "This could, however, be the case if we no longer assessed extraordinary government support as almost certain - for example, if we consider that policy changes had weakened the bank's role, or if we saw signs of weakening government support."
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