Global credit squeeze highlights Kazakh banks' funding vulnerability - S&P |
|
|
|
Published
:
Wed, 15 Aug 2007 15:32
|
MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said the long-standing concerns over the increasing international indebtedness of banks in Kazakhstan have been heightened in recent weeks following tightening liquidity and widening risk premiums due to the recent global credit squeeze, but said it does not plan to take any immediate rating actions on Kazakh banks.S&P said it expects Kazakh banks to weather the current global capital markets situation, unless it becomes chronic, as the banks' fundamentals are still relatively good in terms of business prospects, asset quality, earnings, and capitalization.S&P said concerns about Kazakh banks' reliance on international investor sentiment has been one of the key rating factors that have maintained its highest ratings on Kazakh banks in the speculative-grade category, while the sovereign has been assigned investment-grade ratings.Financial intermediation in Kazakhstan is now among the highest in emerging markets, and although other forms of funding have grown strongly, they have not managed to catch up with lending growth, with the shortfall covered by external borrowing, S&P said.The banks have tried to diversify debt issues in terms of currency, type, maturity, and ultimately investor groups, which gives some protection, the ratings agency said, adding that issued debt is relatively long term, and does not pose an immediate threat. However, syndications, which form the majority of international debt, are much shorter term, and hence more vulnerable to rollover risk, S&P said.TFN.newsdesk@thomson.comans/ejpCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
|
|
|
|
Print this Story
Portugal mkt declines more on profit taking than credit crunch fears - analyst 