BTA unsusceptible to volatile world financial markets24.08.2007 / Press-service
In the light of volatile world financial markets, Bank TuranAlem (BTA) would like to inform its partners, clients and depositors that the developments on the international stock markets do not exert significant adverse effect on BTA performance.
Since the Bank did not have any high-risk mortgage bonds of the US, the decline of the U.S. mortgage-backed securities has exerted no direct influence on its performance.
The indirect effect on BTA performance included a sensible appreciation of foreign debts caused by a prudent approach of investors, who first of all close their positions on the emerging markets in conditions of financial instability.
The Bank has to respond with a balanced increase in rate on all its credit products to the appreciation of foreign funding. This appreciation stems from veered market conditions and has nothing to do with a change in Bank’s liquidity situation. We treat this step as transient and believe that interest rates with be reset as soon as the market hardens and funding costs are reduced.
Bank TuranAlem enjoys ample internal reserves to meet its obligations to foreign investors and local depositors in full and when due.
Given refinancing rates of foreign loans, the Bank always maintains a fixed liquidity surplus. Therefore, it enables the Bank to stick to the repayment schedule without any additional accesses to the foreign market until at least 2008. This liquidity reserve more than doubles the foreign payments pending until 2008.
We admit that increased loan interests will echo in the loan portfolio growth rates, however we believe that it concurrently will serve as a rein that will subsequently have a steadying influence on ratings of banks.
Favorable general economic situation and unconditional backing of the National Bank ensure that any world market crisis will not destabilize the economy of Kazakhstan, including its banking system, one of the most efficient in the former USSR. International rating agencies voice the same opinion. Therefore international rating agencies do not plan to take any immediate rating actions on Kazakh banks as the situation remains manageable and the banks' fundamentals are still good.
Bank TuranAlem pledges all depositors and partners of the Bank can be confident of integrity of their deposits and investments and facing rosy future.