The ratings on Samarkand Bank reflect its anchor of 'b+', its "weak" business position, "very strong" capital and earnings, "weak" risk position, "below average" funding and "adequate" liquidity, as our criteria define these terms. The stand-alone credit profile (SACP) is 'ccc'.

The positive outlook on Samarkand Bank reflects Standard & Poor's Rating Services expectations that the bank's business position and earnings capacity will gradually improve when it receives a foreign exchange license, which is expected in 2012.

Standard & Poor's Rating Services said: “In our view, this will help diversify the bank's clientele. In addition we anticipate that the bank will maintain its "adequate" liquidity and at least "strong" capitalization over at least the next 18-24 months. We also expect that the recently revised strategy might help the bank move away from excessive lending concentrations, including those to related parties, although in the longer term.”

“We could raise the ratings if the bank succeeds in improving its business diversity and revenue base, while continuing to gradually improve its risk management and operational capacity and maintaining capitalization at acceptable levels,” the agency said.

“We could revise the outlook to stable if we see no material improvements in the bank's business development and risk position in the near future, or if the bank fails to realize its strategy of improving business and risk diversification and market positions. We could consider a negative rating action if the bank's RAC ratio were to fall below 10%,” Standard & Poor's Rating Services noted.