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S&P Global Ratings today lowered its long- and short-term issuer credit ratings on Bank RBK JSC to 'D/D' from 'CCC+/C' on general default of its financial obligations.

At the same time, S&P lowered Kazakhstan national scale ratings on Bank RBK to 'D' from 'kzB'.

The downgrade follows the public announcement by the National Bank of Kazakhstan (NBK) that Bank RBK's timely client payments are being made on a limited basis, according to S&P’s report.

“We understand that due to low liquidity Bank RBK currently is servicing only what it considers socially important payments, some of which we understand to be to retail depositors. However, it is currently unclear which obligations the bank is servicing in line with its contractual obligations,” S&P said in a message.

The organization considers Bank RBK to be in default stating, that it currently has insufficient funds available to pay substantially all of its obligations as they come due, given its very low share of liquid assets, which covered only about 11% of its overall deposits as of November 10, 2017.

“Currently Bank RBK's solvency depends largely on shareholders' and government support. We understand that the bank expects to receive 160 billion tenge in Tier-1 capital from shareholders and 243 billion tenge in subordinated debt from the NBK in several payments spread through January 2018.”

S&P will raise the ratings on Bank RBK from 'D' once it is in a position to fulfil its financial obligations on time and in full.

On November 7, 2017, the National Bank of Kazakhstan announced that Bank RBK was making only limited timely payments to clients.

Although Bank RBK is currently making "socially responsible" payments, it isn't meeting the majority of its obligations.

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