Fitch Revises Pasha Yatirim Bankasi A.S.'s Outlook to Negative
OREANDA-NEWS. Fitch Ratings has revised the Outlook on Turkey's Pasha Yatirim Bankasi A.S. (PBTR) to Negative from Stable, while affirming its National Long-term Rating at 'A(tur)'.
KEY RATING DRIVERS
The revised Outlook mirrors the recent revision of that on the parent, Azerbaijan's Pasha Bank OJSC (PB, BB-/Negative), which owns 99.9% of PBTR's shares. The Outlook on PB's ratings was revised to Negative from Stable following the downgrade of the Azerbaijan sovereign ((BB+/Negative) for more details see "Fitch Affirms IBA and Pasha Bank; Downgrades AccessBank on Sovereign Action" dated 9 March 2016 at www.fitchratings.com).
PBRT's rating is driven by potential support from PB. Fitch's view on support reflects (i) the strategic importance of the subsidiary to its shareholder, (ii) close integration between the two banks, (iii) the sizable equity injection already made into PBTR, and (iv) the two banks' common branding.
RATING SENSITIVITIES
PBTR's National Long-term Rating and Outlook are sensitive primarily to changes in its parent's Long-term IDR and Outlook. PBTR could be downgraded in case of a downgrade of PB, and the Outlook could be revised back to Stable in case of a similar action on PB.
At the same time, PBTR's rating may be affirmed at its current level even in case of a downgrade of PB, if either (i) a longer track record of support and integration in Fitch's view warrants an equalisation of parent and subsidiary ratings, considering also the lower (B category) rating level; or (ii) PBRT's standalone profile strengthens to an extent that it is broadly in line with that of its parent.
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