Fitch Affirms Kazakhstan's Bank Caspian at 'B+'; Outlook Stable

Fitch Ratings-London/Moscow-22 February 2007: Fitch Ratings has today affirmed Kazakhstan-based Bank Caspian’s ("Caspian") ratings at Issuer Default 'B+', Short-term 'B', Individual 'D' and Support '5'. The Outlook on the Issuer Default rating ("IDR") remains Stable.

The ratings of Caspian reflect the risks associated with rapid retail loan book growth, increased reliance on foreign funding and certain weaknesses in the operating environment. However, they also take into account the bank’s continued strong performance, sound capital ratios due to internal generation and reasonable liquidity profile.

Upside for the ratings could result from further profitable franchise growth accompanied by good asset quality and the development of track record by the bank’s new management. At the same time, downward pressure could result from a marked deterioration in asset quality, driving pressure on capital adequacy, or an increase in the bank’s risk appetite.

At end-2006, Caspian was the ninth-largest commercial bank in Kazakhstan with a 2.2% share of the banking system’s assets. Although Caspian has been a first mover and leader in the very lucrative express-lending market in Kazakhstan, it continues to also serve the corporate and SME segments. In December 2006, Baring Vostok Capital Partners (“BVCP”), a private equity firm investing in the CIS, became a controlling shareholder in Caspian. As a result of this transaction, 94.7% of the bank's shares were acquired by the Dutch-registered Caspian Group B.V. (rated IDR ‘BBB’ due to a guarantee from Russia’s Vneshtorgbank), which in turn is beneficially owned by BVCP (51%) and Kazakhstani businessman Vyacheslav Kim (49%).