OREANDA-NEWS. August 09, 2012. Moody's Investors Service affirmed Eurasian Bank's standalone E+ bank financial strength rating (BFSR), equivalent to a b1 standalone credit assessment and the B1 long-term foreign-currency deposit ratings. Moody's has also affirmed Eurasian Bank's Not Prime short-term foreign-currency bank deposit rating, B1 local-currency senior unsecured debt rating and B2 local-currency subordinated debt rating. The outlook on the long-term deposit and debt ratings remains negative, reported the press-centre of KASE. 

As it is said the agency's report, the affirmation of Eurasian Bank's ratings reflects the progress that Eurasian Bank achieved over the past two years, especially in improving profitability and asset quality metrics. At the same time the agency stresses that the economic environment in Kazakhstan, which remains challenging for local banks, might lead to further asset quality deterioration in the medium term.

According to the report, the challenging credit conditions in Kazakhstan remain another constraining factor. Kazakhstani banks continue to suffer from the high indebtedness of the real sector and the lack of credit demand. The latter intensifies competition for good borrowers, and may result in either margin contraction or weaker asset quality as a result of a loosening of underwriting standards.