Azerbaijan, Baku, Oct. 28 / Trend E. Kosolapova/
Standard & Poor's Ratings Services had lowered its long-term counterparty credit rating on Kazakhstan-based Temirbank JSC to 'B-' from 'B' and affirmed the 'B' short-term counterparty credit rating, the rating agency reported on Monday. The outlook is stable.
At the same time, S&P lowered the Kazakhstan national scale rating on the bank to 'kzBB-' from 'kzBB'.
"The rating actions follow Samruk-Kazyna's announcement on Oct. 10, 2013, that it had reached a nonbinding preliminary agreement with Bulat Utemuratov to sell all its shares in Temirbank. In our opinion, the sale will likely conclude within the next two years, and we see diminished prospects for further extraordinary support for Temirbank from Samruk-Kazyna, a government-owned entity that manages the country's assets," the agency said.
Although S&P now sees a "low" likelihood of Temirbank receiving further extraordinary support from the government, the agency continues to factor in ongoing support from Samruk-Kazyna in the bank's SACP, which is at 'b-'. For example, S&P expects Samruk-Kazyna to retain its long-term deposits at Termirbank, even after a sale, to avoid destabilizing the bank's funding and liquidity profiles.
S&P noted that Samruk-Kazyna's announcement cited the possibility of a future merger of Temirbank and Alliance Bank. However, the agency considers this highly uncertain over the next 12 months and currently do not factors it into the ratings.
The stable outlook on Temirbank reflects S&P expectation that the bank's SACP will remain unchanged over the next 12 months. Although Samruk-Kazyna might sell Temirbank within this period, the agency sees such an event as neutral for the ratings on the bank.
In S&P view, there is very limited scope for an improvement in the bank's SACP over the next 12 months. By contrast, the agency could take a negative rating action if the bank experienced significant liquidity deterioration, for example due to deposit withdrawals.
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