OREANDA-NEWS. June 28, 2011. Standard & Poor's Ratings Services said today  that it has assigned its 'B/B' long- and short-term counterparty credit ratings  to Kazakhstan- based JSC Delta Bank (Delta). The outlook is stable. At the same time we assigned our 'kzBB+' Kazakhstan national scale rating to the bank.

The ratings reflect the risky operating environment in Kazakhstan, the bank's concentrated loan book and funding base, and high execution risk related to its very rapid expansion strategy. The ratings are also constrained by the bank's modest profitability and limited capital base. These negative factors are  partly offset by the bank's better-than-sector-average reported asset quality  indicators, high share of liquid assets, and good capitalization ratios.

The ratings reflect Delta's stand-alone credit profile and do not include any uplift for extraordinary external support, either from the shareholders or the government.

With total assets of Kazakhstani tenge (KZT) 51.9 billion on Dec. 31, 2010,  Delta Bank was the 21st largest bank in Kazakhstan by total assets and 17th  largest by loans and capital base.

The stable outlook reflects our expectations that Delta's financial factors  will not evolve materially in the near term. We anticipate continued positive  but very low profitability, very high concentration risk, a moderately high  double-digit growth rate, and capital ratios close to regulatory minima.

We could lower the ratings if:

- Asset quality declines, pushing the bank into losses; or

- The liquidity position deteriorates significantly.

Elements that would be positive for the ratings are:

- An increase in the size of Delta's equity base materially above the    regulatory minimum,

- A material and sustainable improvement in profitability,

- A reduction of single-name and industry concentrations on the asset side    and on the liabilities side.