15 June 2023. – Moody’s Investors Service (Moody’s) credit rating agency today upgraded Eurasian Bank’s long-term deposit rating to b1 from b2 and its basic credit rating to b2 from b3, reflecting significant progress in improving asset quality. The outlook on the Bank’s long-term deposit ratings remains positive.

The credit agency emphasizes that the Bank successfully used favorable operating environment in 2022, associated primarily with the change in the banking landscape after the withdrawal of Russian subsidiary banks from Kazakhstan, the emergence of new customers and sources of income, which as a result affected the improvement of asset quality and capital adequacy, improved profitability and solvency indicators.

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

The credit agency notes that the Bank’s measures on recovery of non-performing portfolio and improvement of current portfolio quality, taking into account strict lending standards, resulted in reduction of the share of non-performing loans. The Bank also significantly improved coverage of non-performing loans by provisions.

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

The rating action also reflects Moody’s revision of Moody’s ESG assessment of the Bank’s environmental, social and governance risks. Improvements in the Bank’s credit metrics as a result of sound risk management improved the corporate governance score to G-3 from the previously assigned G-4 for the Bank. As a result, the credit impact of ESG factors improved to CIS-3 from CIS -4.

The credit agency notes that the share of non-performing loans in the Bank’s total loan portfolio decreased to about 13% at 2022-year end, from 22% at 2021-year end and 29% at 2020-year end. In addition, Eurasian Bank significantly improved its coverage of loan loss provisions to 116% at 2022-year end from 65% at 2020-year end.

The Bank’s profitability also improved, with return on average assets rising to over 4% in 2022 from almost 1% a year ago.