BAKU, Azerbaijan, Dec.9
By Nargiz Sadikhova - Trend:
Fitch Ratings has assigned Kazakhstan-based Industrial and Commercial Bank of China JSC (ICBCK) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'BBB+' with Stable Outlooks, Trend reports with reference to the Fitch report.
According to the report, the IDRs of 'BBB+' and Support Rating of '2' reflect Fitch's view of a high probability of support, if needed, from the bank's parent, Industrial and Commercial Bank of China Limited.
“This view is based on full ownership, the high level of integration between the parent and the subsidiary, their common branding, and the low cost of potential support considering the subsidiary's small size relative to the parent's,” the report said.
Fitch notes that ICBCK's Foreign-Currency IDR is capped by Kazakhstan's Country Ceiling, which reflects the probability of transfer and convertibility restrictions, and the risk the subsidiary bank may not be able to benefit from parent support to service its foreign-currency obligations.
“The National Long-Term Rating at 'AAA(kaz)' reflects Fitch's view that the bank ranks among the strongest credits in Kazakhstan,” the report said.
Furthermore, according to the report, the bank's IDRs and Support Rating could be upgraded if Kazakhstan's Country Ceiling is upgraded, while a downgrade of the Country Ceiling would trigger a downgrade of the bank.
“The subsidiary's ratings could also be downgraded in case of a downgrade of the parent by two notches or more; the sale of the subsidiary bank to a lower-rated owner; or a considerable weakening in Fitch's view of the propensity of the parent to support its subsidiary. However, each of these scenarios is currently viewed as unlikely by Fitch,” the report said.
---
Follow the author on twitter: @nargiz_sadikh