TEXT-S&P summary: Kapitalbank

(The following statement was released by the rating agency)

Oct 09 - =============================================================================== Summary analysis -- Kapitalbank ----------------------------------- 09-Oct-2012 =============================================================================== CREDIT RATING: B/Stable/C Country: Uzbekistan Primary SIC: Commercial banks, nec =============================================================================== Credit Rating History: Local currency Foreign currency 16-Dec-2011 B/C B/C 12-Nov-2008 B-/C B-/C =============================================================================== Ratings Score Snapshot Issuer Credit Rating B/Stable/C SACP b Anchor b+ Business Position Moderate (-1) Capital and Earnings Weak (0) Risk Position Adequate (0) Funding and Liquidity Average and Adequate (0) Support 0 GRE Support 0 Group Support 0 Sovereign Support 0 Additional Factors 0 Major Rating Factors Strengths: -- Good liquidity cushion. -- Good and sustainable core business performance. -- Good brand recognition and regional presence in Uzbekistan. Weaknesses: -- High-risk operating environment. -- Weak capitalization. -- Limited business diversity. Outlook

Standard & Poor's Ratings Services' outlook on Uzbekistan-based Kapitalbank is stable,balancing the bank's weak capitalization and the challenges of operating in Uzbekistan againstits good and sustainable core business performance and adequate asset quality.

We view capital as the main weakness for the ratings and therefore the main likely reasonfor a negative rating action. We could lower the ratings if the bank's already weakrisk-adjusted capital (RAC) ratio (before adjustments) were to decrease below 3% as a result ofinsufficient capital increases to match asset growth or higher than expected losses, which wouldburden profit generation. Given Kapitalbank's short-term deposit base, we expect the bank tomaintain good liquidity cushions. Any failure to do so could also put pressure on the ratings.

We could raise the ratings if the Kapitalbank were to demonstrate material and sustainableimprovements in its capitalization, such that its RAC ratio (before adjustments) rose above 7%.This scenario would require a change in the bank's capital management and is unlikely to occurover the next 12 months.

Related Criteria And Research

-- Kapitalbank Upgraded To 'B' From 'B-' On Bank Criteria Change; Outlook Stable, Dec. 16,2011

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011 -- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011 -- BICRA On Uzbekistan Revised To Group '8' From Group '9', Nov. 9, 2011

((Bangalore Ratings Team, Hotline: +91 80 4135 5898swati.ray@thomsonreuters.com,Group id:BangaloreRatings@thomsonreuters.com,Reuters Messaging:swati.ray.thomsonreuters.com@reuters.net))