March 21, 2013 / 2:56 PM / 4 years ago

Fitch Places Alternatifbank on RWP on Qatari Acquisition Announcement

(The following statement was released by the rating agency) LONDON/ISTANBUL, March 21 (Fitch) Fitch Ratings has placed Alternatifbank A.S.'s (ABank) Issuer Default Ratings (IDRs), Long-term National Rating and Support Rating on Rating Watch Positive (RWP). ABank's Viability Rating (VR) of 'bb' is unaffected. A full list of rating actions is at the end of this comment. The rating action follows the announcement by Commercial Bank of Qatar (CBQ) on 18 March 2013 of its agreement to purchase a 70.84% stake in ABank. The transaction is subject to obtaining necessary regulatory approvals in Turkey. ABank's existing majority shareholders, the Anadolu Group, will retain a 25% stake in the bank. An offer will be made to minority shareholders. CBQ's objective is to consolidate a controlling 75% stake in ABank. KEY RATING DRIVERS The RWP reflects Fitch's belief that once the acquisition is complete, ABank will benefit from support from CBQ, should this be required. CBQ's Long-term IDR of 'A'/Stable reflects Fitch's opinion that there is an extremely high probability that the Qatari authorities would support the bank if needed. CBQ is 16.7% owned by Qatar Holding LLC, the Qatar government's investment arm; other government-related entities control a further 12.5% stake. In addition, CBQ is an important player in the domestic banking system. ABank's IDRs and National Rating are currently driven by its VR. Should the acquisition by CBQ be concluded, the bank's IDRs would be driven by potential support from CBQ. In Fitch's view, ABank represents a strategic investment for CBQ. It already controls minority stakes in banks in Oman and UAE and is keen to diversify geographically into markets which offer considerable growth potential, such as Turkey. RATING SENSITIVITIES The RWP will be resolved once regulatory approval for the acquisition is received and ownership changes. Should CBQ acquire the 75% stake in ABank as planned, Fitch's base case expectation is that ABank's foreign currency Long-term IDR would be upgraded to 'BBB' and its Long-term National Rating would be upgraded to 'AAA(tur)', based on support from CBQ. However, prior to resolving the RWP, Fitch will seek clarification about the Qatar Central Bank's position regarding its willingness to allow state support to flow through to banking subsidiaries of Qatari banks located outside the GCC. The bank's Support Rating will likely be revised to '2' from '5' following resolution of the Watch. However, ABank's Support Rating Floor (SRF) of 'NF' will probably be withdrawn, as SRFs are only assigned to banks whose primary source of external support is considered to be the sovereign. Should the CBQ acquisition be completed, this will not be the case for ABank as it would look to its majority shareholder for support. Fitch expects CBQ's ratings will be unaffected by the acquisition of 70.84% of ABank and does not anticipate that the acquisition will have a material impact on CBQ's intrinsic creditworthiness. Fitch will continue to monitor the acquisition as it progresses. The rating actions are as follows: ABank Long-term foreign and local currency IDRs of 'BB' placed on RWP Short-term foreign and local currency IDRs of 'B' placed on RWP National Long-term Rating of 'AA(tur)' placed on RWP Support Rating of '5' placed on RWP Support Rating Floor of 'NF' unaffected Viability Rating of 'bb' unaffected CBQ Long-term IDR of 'A' unaffected Short-term IDR of 'F1' unaffected Support Rating of '1' unaffected Support Rating Floor of 'A' unaffected Viability Rating of 'bbb' unaffected Contact: Primary Analyst Janine Dow Senior Director +44 203 530 1464 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Levent Topcu Director +90 212 284 7819 Committee Chairperson James Watson Managing Director +7 495 956 6657 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable criteria, 'Global Financial Institutions Rating Criteria' dated August 2012, 'Rating FI Subsidiaries and Holding Companies' dated August 2012 and 'National Ratings Criteria' dated January 2011 are available at www.fitchratings.com. Applicable Criteria and Related Research Global Financial Institutions Rating Criteria here Rating FI Subsidiaries and Holding Companies here National Ratings Criteria here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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