15 June 2023 — Moody’s Investors Service (Moody’s) today upgraded the Eurasian Bank long-term deposit rating from b2 to b1, as well as its basic credit rating from b3 to b2, which reflects significant progress in improving asset quality. The outlook for the Bank long-term deposit ratings remains positive.

The Credit Rating Agency emphasizes that the Bank successfully used a favorable operating environment in 2022, primarily due to the change in the banking landscape after the departure of Russian subsidiaries from Kazakhstan, the emergence of new customers and sources of income, which as a result affected the improvement of asset quality and capital adequacy, enhanced profitability and solvency.

“We are pleased to announce that our Bank has received a rating upgrade. This is the expected result of our work: in the last three or four years we have made a qualitative leap in business. The focus on improving risk management, digital transformation and the speed of product and service development has had its effect. We will continue to work closely with our partners and customers to ensure their stable growth and will increase our competitive advantages in different segments of the financial services market,” commented Lyazzat Satiyeva, CEO of Eurasian Bank.

The Credit Rating Agency notes that the Bank measures to improve the non-performing portfolio and enhance the quality of the current portfolio, taking into account strict lending standards, have led to a decrease in the share of non-performing loans. The Bank has also significantly enhanced its reserves coverage of non-performing loans.

Moody’s expects that the Bank will be able to preserve these achievements and maintain asset quality, solvency, profitability and liquidity at a high level despite the potential geopolitical pressure on the domestic operating environment. According to the credit rating agency, active digitalization of products and services, a growing retail customer base will allow the Bank to increase interest and non-interest income.

The rating action also reflects Moody’s review of the ESG assessment of the Bank environmental, social and governance risks. The improvement of the Bank creditworthiness indicators as a result of competent risk management made it possible to improve the assessment of corporate governance to G-3 compared to the previously assigned G-4 for the Bank. As a result, the credit impact of ESG factors has been improved to CIS-3 from CIS -4.

The Agency notes that the share of non-performing loans in the Bank’s total loan portfolio decreased to about 13% at the end of 2022 from 22% at the end of 2021 and 29% at the end of 2020. In addition, Eurasian Bank has significantly improved the coverage of reserves for possible loan losses to 116% at the end of 2022 from 65% at the end of 2020.

The Bank profitability has also improved: the return on average assets has grown to more than 4% in 2022, compared with almost 1% a year ago.