Kas Bank : Fitch affirms A- rating with Stable outlook

We are pleased to inform you that Fitch affirms KAS BANK's A- long-term issuer default rating and the outlook is stable.

Fitch substantiates the ratings for KAS BANK with, among others, the following comments*:

• Fitch views KAS BANK's risk appetite as low and believes that the IT-outsourcing is well-controlled.
• Fitch expects the bank to maintain critical mass in its core asset administration business. Its knowledge of local reporting and regulatory requirements enables it to provide tailor-made value-added reporting services to its customers.
• The ratings also factor in a high, albeit well-managed, exposure to operational risk and some earnings volatility. The bank has sound risk-weighted capitalisation but a small capital base for its rating level.
• Credit risk is very low and stems mainly from the bank's intraday collateralised settlement-related facilities. Exposure to operational risk is high, reflecting the bank's reliance on efficient IT systems.
• In first nine months of this year KAS BANK's profitability benefitted from reduced costs resulting from the IT outsourcing and ongoing staff reduction. The cost-to-income ratio improved to 79%, close to the bank's target range of 70%-77%.

For more information, please read Fitch's full Fitch's full Rating Action Commentary.