QNB FINANS FINANSAL KIRALAMA Fitch Ratings has affirmed three Turkish bank subsidiaries at 'B-' Long-Term Foreign-Currency Issuer Default Ratings (LTFC IDRs).
They are leasing companies - Deniz Finansal Kiralama A.S. (
The Outlooks on all LTFC IDRs are Negative, mirroring those on their respective parents. A full list of rating actions is detailed below.
Key Rating Drivers
Support-Driven Ratings: The ratings of
Highly Integrated Subsidiaries: All three subsidiaries share the same branding as their parents, are highly integrated into their banking groups in risk and IT systems, and draw most of their, board, senior management and underwriting practices from their parent banks. The subsidiaries benefit from the franchises of their parent banks and mostly share the same customer base with a high share of referrals from their respective groups.
High Support Propensity, Limited Ability: Cost of support would be limited as the subsidiaries are small compared with their parents and total assets usually do not exceed 3% of group assets. This, together with other support factors listed above, means that Fitch believes that parents' propensity support to the subsidiaries remains very high. Ability to support is, however, limited by the respective parents' creditworthiness.
Stable National Ratings: The affirmation of all National Rating with a Stable Outlook mirrors their respective parent's National ratings and reflects our view that the three subsidiaries' creditworthiness in local currency relative to other Turkish issuers' is unchanged.
Rating Sensitivities
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The subsidiaries' Long-Term IDRs are sensitive to a downgrade of their parents' Long-Term IDRs or further deterioration in the operating environment triggered by a sovereign downgrade. A downgrade in the parents' National Ratings would also likely be mirrored in the subsidiaries' ratings.
The ratings could be notched down from their respective parents on material deterioration in parents' propensity or ability to support or if the subsidiaries become materially larger relative to the respective banks' ability to provide support.
The ratings could be notched down from their respective parents if the subsidiaries' strategic importance is materially reduced, for example, through a substantial reduction in business referrals, reduced operational and management integration or ownership or a prolonged period of underperformance.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade of the subsidiaries' Long-Term IDRs is unlikely in the short term, given the Negative Outlook, but an upgrade of the relevant parent's ratings would be reflected on the subsidiary's ratings. This would likely be the result of improvements in Turkiye's operating environment.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
All three subsidiaries have ratings linked to their respective ultimate parents' ratings, and therefore either rely on or are sensitive to our assessment of sovereign support or country risks.
ESG Considerations
Unless otherwise stated, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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