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FOR IMMEDIATE RELEASE
LONDON - FEBRUARY 06, 2018 08:11 AM (EST)
A.M. Best has commented that the Financial Strength Rating of C++ (Marginal) and the Long-Term Issuer Credit Rating of “b+” of JSC IC Kazkommerts-Policy (Kazkommerts-Policy) (Kazakhstan) remain unchanged following an announcement on 25 January 2018 by its sister company, Halyk-Kazakhinstrakh, Insurance Subsidiary Company of Halyk Bank of Kazakhstan, JSC (Kazakhinstrakh), of the latter’s shareholder agreement to merge Kazkommerts-Policy into Kazakhinstrakh. The merger decision follows the 2017 acquisition of JSC Kazkommertsbank, Kazkommerts-Policy’s parent, by JSC Halyk Bank (Halyk Bank), Kazakhinstrakh’s parent.
In anticipation of the merger, Kazkommerts-Policy paid a large one-time dividend of KZT 4 billion (approximately USD 12 million) in December 2017, which resulted in deterioration of the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio. In spite of this, the company’s rating fundamentals, including balance sheet strength, remain supportive of its ratings.
The merger is subject to regulatory approvals and is expected to complete during 2018. A.M. Best will continue to monitor closely Kazkommerts-Policy’s rating fundamentals ahead of the planned merger. Further deterioration of risk-adjusted capitalisation, for example due to the additional extraction of capital, could place negative pressure on the company’s ratings.
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