Baku, Azerbaijan, Dec. 25
By Ali Mustafayev – Trend:
S&P Global Ratings raised its long- and short-term issuer credit ratings on Bank RBK JSC to 'CCC/C' from 'D/D'.
“We also raised the national scale rating on Bank RBK to 'kzCCC+' from 'kzD'. We subsequently placed all ratings on the bank on CreditWatch with developing implications,” S&P said in a message.
The upgrade reflects the company’s understanding that Bank RBK has resumed servicing its obligations in full and on time following capital and liquidity inflows from the National Bank of Kazakhstan (NBK) and its majority shareholder Kazakhmys in the past few weeks.
“We understand that, since the beginning of November, Bank RBK has received Kazakstani tenge (KZT)150 billion ($450 million) in subordinated debt from the NBK, of which 100 billion tenge was recognized as a capital gain due to provision of the subdebt at below market rate. Kazakhmys, a leading Kazakhstan natural resources producer, injected 45 billion tenge of fresh capital into Bank RBK and converted its 35 billion tenge deposit into common shares”.
Nevertheless, S&P believes that Bank RBK’s creditworthiness remains vulnerable to customer deposit outflows due to its tarnished reputation.
“The bank’s liquid assets covered its customer deposits and current accounts, susceptible to withdrawal, only by about a reported 55 percent as of December 19, 2017,” according to the message.
The bank’s viability depends on the remaining agreed shareholder and capital support: 93.7 billion tenge subordinated debt from the NBK and 80 billion tenge tier 1 capital injection from the shareholders to be provided by end of January 2018.
“Furthermore, the bank needs to prove its ability to recover customer relationships, regain the trust of depositors, and generate new business”.