S&P Global Ratings on Aug. 7 placed the B long-term counterparty credit rating and kzBB Kazakhstan national scale rating of ATFBank JSC on CreditWatch with negative implications.
This is due to the agency's view that the bank's asset quality is seeing little improvement despite the management's efforts to recover legacy problem loans, as well as the fact that its provisioning coverage ratio decreased to 47% as of 2016-end.
The bank may benefit from the government's upcoming recapitalization program, S&P Global Ratings said. However, at the current stage, there is little clarity over the terms of this program, including the total amount, the banks eligible for support and the support breakdown between different banks, it said.
Moreover, the results of the Kazakh central bank's asset quality review, based on which the amount of potential support will be defined, have not been released.
At the same time, the agency affirmed the bank's B short-term credit rating.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.