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NewswireTODAY - /newswire/ -
Bishkek, Kyrgyz Republic, 2009/09/21 - Moody’s Investor Services announced that it upgraded the long-term foreign and local currency deposit rating for AsiaUniversalBank (AUB) from Caa2 to Caa1 and affirmed its bank financial strength rating at E. All ratings carry a stable outlook.
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This rating reflects Moody’s opinion that the bank has considerably improved its performance in the domestic market. Moody’s also notes, that AUB’s relatively solid capital ratios at end-June 2009 – Tier 1 ratio of 29% and capital adequacy ratio at 35% in accordance with Basel II – and relatively low leverage position the bank relatively favorable to its peers in the context of the rating agency’s asset quality stress tests. AUB’s short term and long term global local currency deposit ratings of Caa1/Not-Prime are at the same level as its Baseline Credit Assessment and do not incorporate any probability of support in case of need, either from the government or from the bank’s shareholders.
«Today’s rating action reflects the straightening of AUB’s domestic franchise in recent years as the largest bank in Kyrgyzstan by total assets and shareholders’ equity, - it is said in the official Moody’s release – The upgrade also takes into account Moody’s opinion that, following its recent acquisition of KyrgyzPromstroybank, AUB’s potential to further straighten its market positions has increased thanks to its considerably enhanced customer reach through a sizeable branch network. This acquisition has added 70 points to AUB’s network, thus increasing its coverage to regions beyond its core market of Bishkek».
To warrant a further upgrade, AUB (aub.kg) would need to achieve better operating efficiency for its developing domestic business in Kyrgyzstan, coupled with further balance sheet diversification and good risk-adjusted profitability, Moody’s notes.
«Development in the domestic market, as well as the development of retail banking have become key factors for growth, - said Mikhail Nadel, Chairman of the Board of Directors, AUB, - Merger with KPSB has become one of the crucial stages in achieving of these leader positions in the Kyrgyz Republic. Together with this, stable outlooks and unchanged financial strength rating, despite global economic downturn and credit crunch, are the most important for us. In spite of the global economic crisis, the bank remains stable, which is reflected in the newly released rating».
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