April 11, 2008 | Cbonds
Moscow, April 11, 2008 -- Moody's Investors Service has assigned B3 long-term and Not Prime short-term local and foreign currency deposit ratings and an E+ bank financial strength rating ("BFSR") to Gallabank. The outlook on all ratings is stable.
According to Moody's, the E+ BFSR reflects Gallabank's visible but limited franchise in the corporate and retail banking segments within the context of Uzbekistan and healthy financial indicators such as profitability and capital adequacy. However, the rating is constrained by the bank's current risk management and corporate governance practices, which are still at their early stage of development, the significant level of concentration in its loan books, which gives rise to uncertainty over the asset quality, as well as somewhat volatile operating environment in Uzbekistan.
In Moody's view, Gallabank would be unlikely to receive support from either the Uzbek authorities or the bank's shareholders in a case of distress. Therefore, the deposit ratings assigned to the bank do not incorporate any expectation of external support and are therefore based on the bank's B3 baseline credit assessment, a measure of its intrinsic financial strength that is mapped from the E+ BFSR.
Moody's notes that at their current level the bank's ratings have limited upside potential in the near term. However, developments that could have positive rating implications include a material strengthening of the risk management function, improved corporate governance practices, a substantial reduction in the loan book concentration, and/or growth in the bank's franchise. A downward change in the bank's ratings, although not very likely at present, could occur in the event of a combination of the following factors: an increase in the loan book concentration, a material erosion of the bank's franchise, deterioration in asset quality indicators and a material weakening of capital adequacy ratios.
Gallabank is headquartered in Tashkent and, as at 31 December 2007, reported total IFRS assets of UZS109 billion (US$84 million) and net income of UZS5 billion (US$3.9 million) for that year, as compared to UZS82 billion (US$67 million) and UZS1.9 billion (US$389,000), respectively, one year previously.
Company: Qishloq Qurilish Bank
|Full company name||Qishloq Qurilish Bank|
|Country of risk||Uzbekistan|
|Country of registration||Uzbekistan|