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Fitch: Outlook for Pasha Bank’s Turkish subsidiary negative

Business Materials 7 April 2017 11:10 (UTC +04:00)
Fitch Ratings has affirmed Turkey-based Pasha Yatirim Bankasi A.S.'s (PBTR) national long-term rating at 'A(tur)' and the outlook is negative.
Fitch: Outlook for Pasha Bank’s Turkish subsidiary negative

Baku, Azerbaijan, April 7

By Leman Zeynalova – Trend:

Fitch Ratings has affirmed Turkey-based Pasha Yatirim Bankasi A.S.'s (PBTR) national long-term rating at 'A(tur)' and the outlook is negative, said the message on Fitch’s website.

The national rating is driven by potential support from PBTR's parent, Azerbaijan's Pasha Bank OJSC (BB-/Negative), which owns 99.9 percent of PBTR's shares, according to the message.

Fitch's view on the probability of support for PBTR considers (i) the potential cost of support given PBTR's moderate relative size (equal to 8 percent of PB's assets at end-2016), (ii) the strategic importance of the subsidiary to its shareholder and its close integration, (iii) the sizable equity injection already made into PBTR, and (iv) the two banks' common branding.

PBTR is currently growing rapidly from a low base, primarily utilizing funding from Pasha Bank. Asset quality metrics are so far strong, and the Fitch Core Capital ratio was a high 53 percent at end-2016, reflecting large initial capital injections made by Pasha Bank.

PBTR's national long-term Rating and outlook are sensitive primarily to changes in PB's Long-Term IDR and Outlook. PBTR's rating could also be affected should Fitch change its view on PB's commitment to PBTR.

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