BAKU, Azerbaijan, December 20. Moody’s affirmed
Kazakh First Heartland Jusan Bank JSC’s B1 local and long-term
local and foreign currency deposit ratings and changed the outlook
from stable to positive on these ratings, Trend reports, citing
Moody’s press service.
The affirmation of ratings, and change in outlook to positive from
stable, takes into account Moody's view that Jusan's business model
will mature bringing in further improvement in profitability, asset
quality, and solvency. According to the bank's management, there
are no further plans for significant acquisitions as the bank
streamlines its business model after large mergers with ATF Bank in
2021 and TsesnaBank in 2019. The deals transformed Jusan into the
sixth-largest bank in Kazakhstan with a market share of about 6
percent in terms of total assets with a large franchise and
distribution network.
Moody's expects that Jusan will gradually improve its asset
quality, reducing its problem loans from a high 38 percent of gross
loans in the next 12-18 months. This reduction will be attributable
to the work-out of legacy problem loans, write-offs, and growth of
better-quality loans, with a lower cost of risk.
Moody’s report also indicates that the rating action also takes
into account the bank's large buffer of liquid assets, which is
strong and reached over 63 percent of the bank's total assets at
the end of Q3 2022. Moody's expects that the bank will partially
utilize its large liquidity cushion to finance its loan portfolio,
but that this will remain robust at over 50 percent of total assets
in the next 12-18 months.
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