BTA Bank -- Moody's: Outlook stays negative for Kazakhstan's banking system

London, 18 May 2015 -- Unchanged since 2008, the banking system outlook is negative for Kazakhstan (Baa2 stable), says Moody's Investors Service. Over the 12-18 month outlook period, Moody's central scenario is for a 20% devaluation in the local currency (tenge) by the end of 2016, making debt servicing much harder for the 30% of the system's loan book that is foreign-currency denominated. Further pressure on capital ratios from currency devaluation could arise as we expect banks' credit costs in 2015 slightly more than double from 1.5% of gross loans reported in 2014. Pre-provision profitability will be negatively affected by higher funding costs due to interest rate rise and the recent shift in favour of foreign-currency deposits.

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