BAKU, Azerbaijan, April 4. Fitch Ratings affirmed the long-term foreign- and local-currency issuer default ratings (IDRs) of Kazakhstan-based Halyk Finance, an investment bank wholly owned subsidiary of Halyk Bank, at 'BBB-' with “Stable” outlook, Trend reports, citing Fitch.
The agency notes that one of the key rating drivers for Halyk Finance is the ties to its parent company, Halyk Bank. As the latter organization is expected to support the former, Halyk Finance is expected to remain resilient to shocks. This view is underpinned by the relatively small size of Halyk Finance compared to the parent company.
The leverage of Halyk Finance remains acceptable around 1.7x at the end of 2022. However, this marks an increase of 0.2x due to losses that consumed 9 percent of the equity of the company.
Among the risks that may contribute to the diminishing rating of the Halyk Finance, Fitch considers the weakening of Halyk Bank’s propensity to support its subsidiary as the reason for the potential reduction of the rating.
Additionally, a downgrade of the parent company will also lead to a downgrade of Halyk Finance.
Fitch Ratings Inc. is an American credit rating agency and is one of the most reputable global rating agencies. The agency aims to provide business intelligence to facilitate the effectiveness of decision-making and decrease the business risks for its clients.