Baku, Azerbaijan, Feb. 12
By Ali Mustafayev – Trend:
S&P Global Ratings today said it lowered its long- and short-term issuer credit ratings on Capital Bank Kazakhstan JSC (CBK) to 'CCC+/C' from 'B-/B' and the national scale rating to 'kzB-' from 'kzB+'.
“We placed the long-term issuer credit rating and the national scale rating on CreditWatch with negative implications,” S&P said in a message.
The downgrade reflects the agency’s view that the viability of CBK's operations in the Kazakh banking sector are uncertain and hinge on the bank's ability to secure stable funding sources, and generate new, profitable business on a sustained basis.
“The CreditWatch placement reflects our uncertainty regarding the bank’s ability to assemble sufficient liquid assets in order to repay its 26.5 billion tenge loan (about $82 million on Feb. 9, 2018) to National Bank of Kazakhstan (NBK) by March 31, 2018”.
The rating actions also reflect S&P’s concerns regarding the likelihood of potential customer deposit outflows, which could deplete the bank's 7 billion - 8 billion tenge in liquid assets (about 15 percent of total assets), following NBK’s loan repayment at end-March 2018. This could result in CBK breaching regulatory liquidity coefficients.
“In addition, we have doubts about CBK’s ability to build and sustain a more stable deposit base over the long run without shareholder or regulator support”.