The bank's B2/Not Prime long-term and short-term foreign currency deposit ratings were also affirmed. The outlook on the long-term global scale ratings is stable.

According to Moody's, QQB's standalone E+ BFSR, which maps to a long-term scale of B3, remains constrained by its narrow franchise, relatively high single-sector and single-product concentrations in the loan portfolio; and risks associated with rapid growth and the unseasoned nature of the loan book. The ratings also reflect QQB's sound financial indicators, including liquidity and capitalisation.

In 2010, QQB remained focused on implementing a state programme for developing rural construction and mortgage lending; the latter contributed over 60% to the bank's loan book and over 40% to total assets as at YE2010. QQB's near-90% assets growth in 2010 was mostly financed by long-term deposits from state funds and timely capital injections, which helped the bank to protect the maturity match between assets and liabilities, and to maintain healthy capital adequacy of over 40%. Moody's views positively the expansion of the bank's franchise; however, the rating agency notes the risks related to relatively high product and sector concentrations as well as uncertainty over the bank's strategy after 2015 when the government programme expires.

At the same time, QQB's GLC deposit rating of B1 received a two-notch uplift from the bank's long-term scale based on Moody's assumption of high probability of extraordinary support from the government in case of distress. In 2009-2010 Moody's saw the evidence of the government commitment to develop the bank by injecting new capital. Given that the state owns over 75% of QQB, the bank is likely to benefit from access to capital and liquidity going forward, as it serves socially and economically important sectors.

Moody's last rating action on Qishloq Qurilish Bank was on 17 December 2009 -- when Moody's upgraded the bank's GLC deposit rating to B1 from B2 and global foreign currency rating to B2 from B3 along with a stable outlook.

Domiciled in Tashkent, Uzbekistan, QQB reported -- as at 31 December 2010 -- total assets of US$430 million, shareholders' equity of US$106 million and net income of US$4.2 million, according to unaudited local GAAP.