Long-term foreign currency Issuer Default Rating (IDR): downgraded to 'B+' from 'BB-'term local currency IDR: downgraded to 'B+' from 'BB-'ook Stable
- Short-term foreign and local currency IDRs: affirmed at 'B'
- National Long-term rating: downgraded to 'BBB+(tur)' from 'A+(tur)'ividual Rating: affirmed at 'D'
- Support Rating: downgraded to '5' from '3'
The downgrade reflects Fitch's revised view of potential support from its majority shareholder, Bahrain-based Albaraka Banking Group (ABG). While Fitch believes ABG has a strong propensity to support, its ability to do so can not be relied upon, given its structure as a group of diversified subsidiaries spread across different sub-investment grade countries and Albaraka Turk's large size relative to the group.
For this reason, the Support Rating has been downgraded to '5' from '3', and Albaraka Turk's IDRs and National Rating are now driven by its intrinsic strength. The 'B+' Long-term IDR reflects the bank's small size and concentration risks in its loan book, particularly in construction sector lending. Robust profitability, minimal market risk and low NPL ratios are rating positives.
Albaraka Turk is 54.1%-owned by ABG, a leading Islamic banking group. Albaraka Turk offers interest-free banking services mainly to its corporate and SME customers. It is a small bank with a 0.8% share in total banking system assets, ranking 20th among Turkey's 49 financial institutions in 9M10.
Source : http://www.strateji.com.tr/scripteng/Haber.asp?v=20101224140824 - Dec 24, 2010
