Source: Eurasia Capital                   Date: 09 December, 2010

Fitch has announced that it has affirmed long-term foreign and local currency Issuer Default Ratings (IDR) for Khan Bank and XacBank at B, with positive and stable outlooks respectively, each up from previous negative outlooks. Fitch affirmed both banks’ Individual Rating at 'D/E' and short-term foreign currency IDR at B.

Additionally, Fitch has upgraded Khan Bank's Support Rating to 4 from 5, and Support Rating Floor to B from B-; while, for XacBank, the agency affirmed its Support Rating at 5 and Support Rating Floor at B-. The rating agency has said, “Khan Bank's profitability is recovering largely due to lower impairment charges from the bank's stabilizing loan quality following a macroeconomic recovery, which allows the bank to increasingly withstand potential losses. Fitch has thus revised the Outlook to Positive. Khan Bank's Support Rating and Support Rating Floor have been upgraded following an upgrade of the Mongolian sovereign Long-term IDRs to 'B+' from 'B' on 23 November.”

In the case of XacBank, Fitch said, “Without substantial bolstering of its capitalization and/or reserve levels, upgrades of the Individual rating, and in turn the Long-term IDRs, are unlikely. However, XacBank's relatively good profitability through solid revenue generation and its sound liquidity - notwithstanding its funding profile - should partly mitigate such potential risks. Fitch does not expect deterioration in profitability in the near-term. This view underpins the revision of the Outlook to Stable from Negative."