Kazkommertsbank AO : Long-Term Rating Raised To 'B-' On Improved Prospects

20.10.2016

20 October 2016, Almaty. On October 19 2016, S&P Global Ratings raised its long-term counterparty credit rating on Kazkommertsbank to 'B-' from 'CCC+'. National scale rating was upgraded to «kzB+» from «kzB-». Short-term credit rating was confirmed at «С».

The upgrade reflects strengthened capitalization of KKB, as measured by S&P risk-adjusted capital ratio (RAC), thanks to positive net income in the first half 2016. Rating downgrade in May 2016 resulted from low level of the RAC between 2% and 3%. As at 30 June 2016 the RAC was at 4.5%.

The rating agency also attributes improve profitability and capitalization to arrival of new major shareholder of the Bank: 'The bank's majority shareholder, Kenges Rakishev, installed the new management team in spring 2016, and we assume it will be more proactive in developing new business (mainly retail and SME) and recovering problem assets than the bank's previous management and shareholders, under which these problem assets materialized.' - says the report of S&P.

Major factors that led to rating upgrade also include, among others, growth in the share of retail and SME loans as well as decrease in loans to construction and real estate sectors in line with previously announced strategy of the Bank.

In addition, the management of the Bank believes that timely repayment of Eurobonds in July 2016 also contributed to the rating upgrade.

The negative outlook on KKB reflects pressure on the Bank from the negative trends in the Kazakh economy and banking sector.

'Decision of S&P Global Ratings to upgrade long-term credit rating of Kazkommertsbank is an important signal for positive changes in the Bank. We have new strategy, and preliminary results show that we have chosen the right direction. In a relatively short period of time, key performance indicators of the Bank improved. We believe it helped to change the perception of the Bank by the rating agency', commented Mr. Abay Iskandirov, the first deputy CEO of the Bank.
About Kazkommertsbank

Kazkommertsbank (KKB) is one of the largest banks in Kazakhstan and Central Asia with total assets of KZT 4,893 billion at 30 June 2016.
In addition to its core banking business (retail and corporate) KKB has subsidiaries active in asset management, insurance and brokerage. KKB also has foreign subsidiaries in the Russian Federation and Tajikistan.
Major shareholders of Kazkommertsbank include Mr. Kenges Rakishev, Qazaq Financial Group, Central Asian Investment Company, Mr. Nurzhan Subkhanberdin and the Kazakh Government through the Samruk-Kazyna National Welfare Fund. KKB's predecessor, Medeu Bank, was founded in July 1990, and re-registered as Kazkommertsbank in October 1991. KKB completed an IPO in GDR form on the London Stock Exchange in November 2006, the first CIS bank to do so, in a deal totalling US$845 million. The Bank's shares are listed on the Kazakhstan Stock Exchange.

Contact details:
Kazkommertsbank
Alma Buirakulova, Investor Relations
Tel.: +7 (727) 258-51-25
E-mail: investor_relations@kkb.kz
Larissa Kokovinets, Director, Public Relations
Tel.: +7 (727) 258-54-56
E-mail: pr@kkb.kz