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Fitch affirms IDRs of Alliance Bank and BTA Bank
Astana, February 9 2009
Friday Fitch Ratings affirmed Kazakhstan-based BTA Bank's (BTA) and Alliance Bank's (Alliance) Long-term Issuer Default ratings (IDRs) at 'BB' and 'BB-'(BB minus), respectively, with Negative Outlooks, the rating agency says in a Friday statement.
At the same time, the agency downgraded the Individual ratings of both banks to 'F', and placed BTA's perpetual preferred securities on Rating Watch Negative (RWN). The agency also put the ratings of four foreign affiliates of BTA - BTA Russia, BTA Kazan, BTA Georgia and BTA Belarus - on RWN. The ratings of Temirbank, a domestic subsidiary of BTA, including its Long-term IDR of 'BB-'(BB minus) with a Negative Outlook, are affirmed.
The rating actions follows the recent announcement that the Kazakhstan government, through the National Welfare Fund Samruk-Kazyna (SK), is acquiring a 78.14% stake in BTA through the purchase of a new share issue for KZT251bn. SK is also considering an offer from Seimar Alliance Financial Corporation to purchase a 76% stake in Alliance for the symbolic amount of KZT100; SK has also placed a KZT24bn deposit with Alliance to support its liquidity.
In Fitch's view, these events confirm the agency's long-stated position that the Kazakh authorities would be likely to have a high propensity to support, in case of need, banks which they consider to be systemically important. However, the two-notch differential between the Long-term foreign currency IDR of the sovereign ('BBB-' (BBB minus)/Negative Outlook) and those of BTA, Kazkommertsbank and Halyk Bank (all rated 'BB'/Negative Outlook) continues to factor in the difference in the ability of the authorities to service the sovereign's own, relatively moderate, debt and to provide sufficient support to the banks, in case of need, to meet their much larger obligations.
The Negative Outlooks on BTA's and Alliance's IDRs reflect those on the sovereign rating. Any further downgrade of the sovereign would likely result in a downgrade of the banks. The banks could also be downgraded should the Kazakh authorities seek to impose a restructuring of their obligations, for example, in response to any attempts by creditors to accelerate the banks' debt