OREANDA-NEWS. Fitch Ratings has upgraded Finansbank A. S.'s (Finansbank) Long-Term Foreign Currency Issuer Default Rating (IDR) to 'BBB' from 'BBB-', Long-Term Local Currency IDR to 'BBB+' from 'BBB-, 'Short-Term IDRs to 'F2' from 'F3' and National Long-Term Rating to 'AAA(tur)' from 'AA+(tur).' The Support Rating has been upgraded to '2' from '3'. The ratings have been removed from Rating Watch Positive (RWP) and the Outlooks on the Long-Term IDRs and National Long-Term Rating are Stable. A full list of rating actions is at the end of this rating action commentary.

The rating actions follow the acquisition of a 99.81% stake in Finansbank by Qatar National Bank (QNB; AA-/Stable) on 15 June 2016. Finansbank's IDRs, National Rating and Support Rating have been upgraded because Fitch believes QNB would be very likely to provide support to its subsidiary, if required. QNB's ability to provide support could be moderately constrained by Qatari regulatory limits in respect of the amount of support banks can extend to their foreign subsidiaries, but in Fitch's view, these limits are unlikely to be binding.

The Support Rating Floor (SRF) has been affirmed and withdrawn, as Fitch only assigns SRFs to banks whose primary source of external support is considered to be the sovereign. This is no longer the case for Finansbank.

Finansbank's Viability Rating is unaffected.

KEY RATING DRIVERS

FINANSBANK IDRS, NATIONAL RATINGS AND SENIOR DEBT

Finansbank's IDRs, National and Support Ratings are now driven by potential support from QNB. The Stable Outlook mirrors that on the Turkish sovereign. Fitch views Finansbank as a strategically important subsidiary for QNB and believes there is a high probability it would receive support from its parent.

However, Finansbank's Long-Term Foreign Currency IDR is constrained by Turkey's 'BBB' Country Ceiling. Its 'BBB+' Long-term local currency IDR also takes into account country risks. QNB's own ratings are driven by Fitch's expectation of a very high probability of support from the Qatari authorities should it be required.

Finansbank's Short-Term IDRs have been upgraded to 'F2', the higher of the two possible Short-Term IDRs corresponding to its Long-Term IDR of 'BBB', reflecting Fitch's view of potential liquidity support from QNB.

FINANS LEASING IDRS AND NATIONAL RATINGS

The Long - and Short-Term IDRs and National Ratings of Finans Finansal Kiralama A. S. (Finans Leasing) are equalised with those of its direct parent, Finansbank, reflecting Fitch's view that it is a core, highly integrated, subsidiary of the bank. The upgrade of the Short-Term IDRs to 'F2' from 'F3' reflects potential liquidity support from Finansbank and, ultimately, QNB.

RATING SENSITIVITIES

IDRS, NATIONAL RATINGS AND SENIOR DEBT OF FINANSBANK

Finansbank's IDRs, National and potentially also its Support Rating could be downgraded in the event of i) a weakening of the parent bank's ability to provide support if this is reflected in a multi-notch downgrade of its Long-Term IDRs; ii) a downgrade of Turkey's sovereign rating and revision of its Country Ceiling; or iii) a weakening in the parent bank's propensity to support its subsidiary. None of these scenarios is currently expected by Fitch.

Finansbank's Long-Term Foreign Currency IDR could be upgraded if Turkey's Country Ceiling is revised upwards. An upgrade of the Long-Term Local Currency IDR would be contingent on a Turkish sovereign upgrade.

IDRS, NATIONAL RATINGS AND SUPPORT RATINGS OF FINANS LEASING

Finans Leasing's ratings are sensitive to any changes in (i) Finansbank's ratings; and (ii) Fitch's view of the propensity and ability of Finansbank to provide support in case of need.

The rating actions are as follows:

Finansbank A. S.

Long-Term Foreign Currency IDR: upgraded to 'BBB' from 'BBB-'; off RWP; Stable Outlook

Long-Term Local Currency IDR: upgraded to 'BBB+' from 'BBB-'; off RWP; Stable Outlook

Short-Term Foreign and Local Currency IDRs: upgraded to 'F2' from 'F3'; off RWP

National Long-term Rating: upgraded to 'AAA(tur)' from 'AA+(tur)'; off RWP; Stable Outlook

Viability Rating of 'bbb-' unaffected

Support Rating: upgraded to '2' from '3'; off RWP

Support Rating Floor: withdrawn at 'BB-'

Senior unsecured Long-Term rating upgraded to 'BBB' from 'BBB-'; off RWP

Senior unsecured Short-Term rating upgraded to 'F2' from 'F3'; off RWP

Finans Finansal Kiralama A. S.

Long-Term Foreign Currency IDR: upgraded to 'BBB' from 'BBB-'; off RWP; Stable Outlook

Long-Term Local Currency IDR: upgraded to 'BBB+' from 'BBB-'; off RWP; Stable Outlook

Short-Term Foreign and Local Currency IDRs: upgraded to 'F2' from 'F3'; off RWP

Support Rating affirmed at '2'

National Long-Term Rating: upgraded to 'AAA(tur)' from 'AA+(tur)'; off RWP; Stable Outlook