S&P Global Ratings on Oct. 10 downgraded Kazakhstan-based JSC AsiaCredit Bank's long- and short-term issuer credit ratings to CCC+/C from B-/B, with a negative outlook.

The rating agency also lowered the lender's national scale rating to "kzB" from "kzBB-."

S&P said the downgrade reflects the continued worsening of AsiaCredit's funding profile in 2018, following a decline in clients' confidence in small and midsized lenders. The bank's ability to attract new customers and retain current clients has significantly weakened, the agency added.

Meanwhile, the bank will have to set aside substantial loan loss provisions following an audit by Kazakhstan's central bank, S&P said.

Should AsiaCredit fail to resume its business dynamism and stabilize its depositor base, its current capital and/or liquidity buffers will most likely erode in the next 12 months and increase the risk that the bank will breach regulatory ratios, S&P added.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings document referred to in this news brief can be found in the sources section.