Fitch affirms Denizbank

Fitch Ratings said it affirmed Denizbank AS' long-term foreign-currency issuer default rating at BB, short-term foreign-currency issuer default rating at B, long-term local-currency issuer default rating at BBB-, short-term local-currency issuer default rating at F3, national long-term rating at AAA(tur), individual rating at C and support rating at 3.

The outlook is stable.

The agency said Denizbank's foreign-currency issuer default ratings reflect its individual financial strength and are also underpinned by the support it could expect to receive from its parent, Dexia, in case of need. Despite the important changes in the ownership structure of Dexia in 2008, Dexia's management has publicly stated that it continues to view Denizbank as a strategic subsidiary, Fitch said.

Denizbank's individual rating reflects its well-established and improving franchise in niche areas, stable deposits, good profitability and improved capitalization, according to the agency.

Fitch said these are balanced by growing dependence on parent funding, gradual deterioration of asset quality in a tougher operating environment and its rapid growth and appetite for market share, which could lead to further asset quality problems.

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