We recommend to HOLD bonds of Bank CenterCredit JSC (BCC). Our recommendation is driven by low share of FX loans in the loan portfolio, high share of liquid assets, weak capitalization and a breaching covenant in relation to a loan obtained from Citibank International Plc.
The lower yield-to-maturity of BCC's perpetual subordinated bonds denominated in US dollars (8.3%, $80.0) in comparison to the Kazkommertsbank (9.6%, $70.1) and ATF Bank (12.8%, $64.3) reflects BCC’s higher asset quality. Historically, the share of non-performing loans in BCC's portfolio has been significantly lower than that of its peers'. Moreover, the share of FX loans in loan portfolio in BCC is lower than the level of FX loans in KKB and ATF.
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