Development Bank of Kazakhstan ratings affirmed at "BB+/B"


According to the rating agency, DBK plays "a critical role for the government, being its tool for implementing long-term strategic programs and projects.

Confirmation of ratings reflects the opinion of S&P Global Ratings

on "virtually unconditional" probability of providing timely extraordinary state support to the DBK in a stressful financial situation for it. DBK is the largest organization within Baiterek National Managing Holding JSC (Baiterek group), and we expect it to remain a "key" subsidiary in terms of implementing the group's overall strategy to support growth and diversification of the country's economy.

Analysts of the agency believe that significant support from the state will continue to have a positive impact on the DBK indicators. Our assessment of the probability of providing the DBK with extraordinary state support as "virtually unconditional" is based on the following factors:

— "inextricable" relations of the bank with the Government of the Republic of Kazakhstan, since it is 100% owned by the state and controlled by it through the Baiterek group. DBK was established in 2001 in accordance with the decree of the President of the Republic of Kazakhstan and has a special status of the national development institute in accordance with the Law of the Republic of Kazakhstan "On Development Bank of Kazakhstan". DBK is not required to have a banking license and comply with the prudential requirements set for commercial banks. Previously, the government increased the capital of DBK through the Baiterek group. The Bank's share capital has repeatedly increased in the past, in particular, recently, in May 2020, the Bank received 50 billion tenge;

— "critically important" role of the Bank as the main financial instrument of the government to implement the programme for infrastructure development manufacturing and processing industries. DBK provides large-scale long-term investment loans and leasing financing to Kazakhstani industrial companies. Thus, DBK is larger than most Kazakhstani commercial banks in terms of the size of its portfolio.


DBK provides long-term loans to finance large-scale and capital-intensive investment projects that are of strategic economic or social significance to the Government of the Republic of Kazakhstan. The Bank is a key financial institution that ensures the implementation of several state programs, including the State Program for Industrial and Innovative Development of the Republic of Kazakhstan and the State Program for Infrastructure Development "Nurly Zhol"; the validity of these two programs was extended until 2025.

The DBK Development Strategy, announced in September 2017, provides for an increase in the share of non-state financing from approximately 59% in 2016 to at least 80% of the volume of attraction by 2023, as well as an increase in the share of private business projects in the Bank's loan portfolio from 57% in 2016 to at least 70% by 2023, in accordance with the intention of the President of the Republic of Kazakhstan to reduce state participation in the country's economy. In our opinion, this does not indicate a decrease in the likelihood of DBK providing extraordinary state support.

The rating of DBK ("BB+") is one step lower than the sovereign rating for national currency obligations ("BBB -") due to the fact that, in our opinion, the government's readiness to support SAO may decrease. Our point of view is based on the relatively limited involvement of the government in ensuring timely payments for the obligations of the railway operator NC Kazakhstan Temir Zholy JSC (KTZ), which is a "key" subsidiary of the Holding "Samruk-Kazyna". For more information, see the article "Ratings of Development Bank of Kazakhstan JSC lowered to "BB+/C" due to a negative trend in government support; forecast - "Negative", published on June 30, 2017 in RatingsDirect.

In addition, S&P Global Ratings analysts evaluate DBK's rating in accordance with their methodology for assigning ratings to a group of organizations, since DBK is part of the Baiterek group. Credit profile (GCP) of Baiterek Group reflects the credit quality of the consolidated operations of the group, taking into account the extraordinary support from the Government of Kazakhstan. Our GCP score ("bb +") is also one notch lower than the sovereign rating for obligations in national currency ("BBB-"). We assess the Baiterek group's own creditworthiness characteristics (excluding government support) at the level "b". Our assessment reflects the relatively high economic and industry risks inherent in the banking system of Kazakhstan, the group's significant capital reserves, which reduce the risks associated with the group's role as a public policy instrument, and the group's high dependence on market funding.

We consider DBK to be the "key" structure of the Baiterek group: as of the end of 2019, DBK accounted for about 50% of the group's consolidated assets; DBK plays a critical role in the economy by financing major investment projects in industry. As a result, we equate our DBK rating with the GCP rating of Baiterek group. The main task of DBK is to develop priority sectors of the economy through investment, which corresponds to the overall strategy of the Baiterek group. We consider the privatization of DBK extremely unlikely.

The forecast "Stable" for DBK's ratings reflects a similar forecast for the ratings of the Republic of Kazakhstan. Any rating actions with respect to sovereign ratings are likely to lead to similar actions with respect to the Bank's ratings.

We can downgrade DBK's ratings if we see signs of weakening of the state support provided to Baiterek group or, more broadly, to other SAO in the next 12 months.

We can increase the bank’s ratings if the SAO debt monitoring system is improved and the mechanisms for providing extraordinary support for SAO in Kazakhstan are improved, the S&P Global Ratings reports.

In turn, the Head of the Development Bank of Kazakhstan Abay Sarkulov noted:


"DBK works with major investment projects, in which we also welcome the participation of investors. In green energy projects, DBK already cooperates with the international company Universal Energy represented by its project company Eneverse Kunkuat, and the German company DERA GmbH was the investor of the project "EcoProTech-Astana" LLP. And ratings of international agencies confirm that the Bank is one of the reliable and experienced partners in Kazakhstan."

АО «Банк Развития Казахстана»
проспект Мәңгілік Ел, здание 55 А, н.п. 15 Z05T3E2 Астана
+7 (7172) 79 26 79