ForteBank forgoes ratings by S&P Global Ratings
S&P Global Ratings has canceled its ratings for ForteBank, as the financial entity decided to «suspend its participation in the rating process by the agency.» ForteBank will rely only on ratings from Moody’s and Fitch, the bank said in a statement.
According to Bekzhan Pirmatov, the bank’s board chair, ratings from the two agencies are enough for ForteBank to confirm its solvency and sustainability for clients, shareholders and investors.
«Ratings from Moody’s and Fitch, the two prominent international rating agencies, fully reflect the bank’s high performance, business model and market prospects. Our team is consistent regarding our development strategy as it pursues digitalization of the bank’s services, sustainable growth, and balanced portfolios,» Pirmatov said.
In late March 2024, S&P revised its outlook for ForteBank from Stable to Positive and raised its rating from «kzA-» to «kzA» on the national rating scale. It also affirmed long-term and short-term credit ratings at «BB-/B.»
In August 2023, Fitch raised the long-term default rating of the bank from «ВВ-» to «ВВ»; its sustainability rating from «bb-» to «bb» and its long-term national scale rating from «A-(kaz)» to «A(kaz).» Outlook was stable. In November 2023, Moody’s also improved ForteBank ratings to «positive» and affirmed the rating on local and foreign currency exchange deposits at «Ba2.»
ForteBank is one of the top five biggest banks in Kazakhstan. It is controlled by Kazakhstani mogul Bulat Utemuratov (81.82%) and his son Alidar (7.5%). Minority shareholders own the remaining 10.68% of shares.
In late 2022, Alidar Utemuratov bought a 5% share in the bank from his father. In April 2023, he bought an additional 2.5% shares. Under the deal with his father, Alidar can boost his share in the bank up to 10% within the next seven years. He acquired shares from his father on arm’s length terms. At the time, the bank representatives said that they planned to strengthen the digital component of Forte and that Alidar’s experience in establishing and managing IT companies would come in handy.
As of March 1, 2024, the bank controlled $7.8 billion in assets, $3.3 billion in its loan portfolio, and more than $5.1 billion in deposits. The bank runs 20 branch offices and 100 outlets throughout the country. According to the National Bank, ForteBank earned $50 million in January and February.
Over the period from late February to early March, ForteBank stocks rallied as they became 2.5 times more expensive, reaching $0.022 per share. As the Qazaq Association of Minority Shareholders (QAMS) noted, ForteBank shares peaked on March 18 and declined to $0.014 per share on March 20. That day was the first day the bank had reported a decline in its share price (by 16.7%) since May 2022 and stopped the rally that started on February 27. As of April 1, the bank’s shares were traded at 6.3 tenge per share ($0.014). Bank CenterCredit reported a similar trend: from February 8 to March 11, the stock’s value increased by 1.7 times.
According to analysts Kursiv has talked with, stock prices grew due to good performance and potential dividend payouts. The QAMS also said that ForteBank’s sharp increase and decline in share price was caused by the so-called Pump&Dump strategy. This market strategy aims to boost the price of cheap assets at the expense of many speculative transactions driven by false and unjustified recommendations.
