Fitch revises Yapi Kredi view downward

Fitch Ratings said it revised Yapi ve Kredi Bankasi AS’s outlook to negative from stable and affirmed the bank’s long-term foreign currency issuer default rating at B+. Fitch also downgraded the bank’s long-term local currency IDR to B+ from BB-. The outlook on this rating is stable.

Fitch also revised the LTFC IDR outlooks of YKB’s subsidiaries, Yapi Kredi Finansal Kiralama (Yapi Kredi Leasing), Yapi Kredi Faktoring and Yapi Kredi Yatirim (Yapi Kredi Investment), to negative from stable to mirror those on the parent.

These rating actions follow the announcement by UniCredit SpA, YKB’s joint controlling shareholder, of its plan to significantly cut its stake in YKB.

UniCredit and Koc Group each have a 50% stake in Koc Financial Services, which owns 81.9% of YKB. The remaining shares are traded on the Borsa Istanbul. On Nov. 30, the two shareholders announced UniCredit plans to buy a direct 31.9% stake in YKB from KFS and for the remaining part of its KFS stake to be sold to Koc Group, reducing UniCredit’s effective ownership of YKB. Following this change in ownership structure, Koc Group will become YKB’s largest shareholder with a 49.99% stake (40.95% indirectly through KFS and 9.04% directly). Subject to regulatory approval, the parties expect to complete these transactions by the end of June. In addition, UniCredit plans to fully deconsolidate YKB by 2023, Fitch said.

Fitch believes the likelihood of Unicredit helping YKB has fallen significantly and revised downwards its view of any support. “YKB’s ratings, which had hitherto been driven by potential support from UniCredit, are now driven by the bank’s Viability Rating (VR), or standalone creditworthiness. The negative outlook on YKB’s LTFC IDR reflects downside risks to the bank’s standalone profile given operating environment risks,” said Fitch in a press release.

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