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Fitch Rates Bank Centercredit's Upcoming Local Bonds 'B(EXP)'
April 14, 2014 / 1:51 PM / 4 years ago

Fitch Rates Bank Centercredit's Upcoming Local Bonds 'B(EXP)'

(The following statement was released by the rating agency) MOSCOW, April 14 (Fitch) Fitch Ratings has assigned Bank Centercredit's (BCC) upcoming series 4 and series 5 senior unsecured local currency bonds under the second bond programme an expected long-term rating of 'B(EXP)' and an expected National long-term rating of 'BB+(kaz)(EXP)'. The issues' expected Recovery Ratings are 'RR4(EXP)'. The bonds' details are as follows: KZT10bn series 4 bonds with a maturity of three years and a 7.5% coupon paid semi-annually KZT15bn series 5 bonds with a maturity of five years and an 8% coupon paid semi-annually KEY RATING DRIVERS The issues' ratings are aligned with BCC's Long-term local currency Issuer Default Rating (IDR) of 'B' and National Long-term rating of 'BB+(kaz)'. BCC's ratings reflect the significant deterioration of its asset quality, its moderate capitalisation, weak profitability and increased reliance on National Bank of Kazakhstan (NBK) funding following recent deposit outflows. However, the ratings are supported by the bank's reasonable coverage of currently recognised problem loans, fairly conservative management and a generally supportive operating environment. RATING SENSITIVITIES Any changes to BCC's Long-term local currency IDR would impact the issue ratings. Significant continued deterioration of asset quality putting more acute pressure on the bank's capitalisation could result in a downgrade. Upside potential for BCC's ratings is currently limited. However, stabilisation of asset quality trends and improvements in performance and capitalisation would be credit-positive. BCC's ratings could be upgraded by several notches if its major shareholder, Korea's Kookmin Bank (KMB, A/Stable; 42% stake) consolidates a majority stake in the bank and affirms its strategic commitment to BCC. However, Fitch views this scenario as unlikely in the near term. Contacts: Primary Analyst Aslan Tavitov Associate Director +7 495 956 7065 Fitch Ratings CIS Ltd 26 Valovaya Street Moscow 115054 Secondary Analyst Konstantin Yakimovich Associate Director +7 495 956 9978 Committee Chairperson Alexander Danilov Senior Director +7 495 956 2408 Media Relations: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email:; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: Additional information is available at Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 31 January 2014, 'Recovery Ratings for Financial Institutions', dated 24 September 2013, 'National Scale Ratings Criteria ', dated 30 October 2013, are available at Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Recovery Ratings for Financial Institutions here National Scale Ratings Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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