TEXT-Fitch affirms Denizbank at 'BBB-';maintains Russian subsidiary on RWE

(The following statement was released by the rating agency)

Oct 02 - Fitch Ratings has affirmed Denizbank A.S.'s Long-term foreign currency Issuer Default Rating (IDR) at 'BBB-'. At the same time, the agency has downgraded Denizbank's Long-term local currency IDR to 'BBB-' from 'BBB'. The ratings have Stable Outlooks. Fitch has also maintained Denizbank's Russian subsidiary, CJSC Denizbank Moscow's (DM) Long-term IDR of 'BBB-' on Rating Watch Evolving (RWE). The rating actions follow the announcement on 28 September 2012 by Belgian-based bank Dexia ('A+'/Negative) that it has completed the sale of a 99.85% stake in Denizbank to Russia's Sberbank ('BBB'/Stable). A full list of rating actions is at the end of this commentary.


Denizbank's Long-term foreign currency IDR is driven by the bank's stand-alone profile, as reflected in its 'bbb-' Viability Rating (VR), and is now underpinned by potential support from Sberbank.

The Long-term local currency IDR has been downgraded by one notch to bring this into line with the Long-term foreign currency IDR. Previously, the Long-term local currency IDR had been one notch higher to reflect the slightly greater potential support from Dexia, given the latter's higher rating.

Fitch classifies Denizbank as a 'strategically important' subsidiary for Sberbank, given the latter's focus on expansion in eastern Europe, and believes Sberbank would have a high propensity to provide support in case of need.


An upgrade of Denizbank's Long-term IDRs would require (1) an upgrade of Turkey's Country Ceiling ('BBB-'), and hence probably also of Turkey's sovereign ratings ('BB+'/Stable), and (2) either an upgrade of Denizbank's VR, or an upgrade of Sberbank's Long-term IDRs (the latter indicating Sberbank's greater ability to provide support to its subsidiary).

Denizbank's IDRs could be downgraded if there was a lowering of the Country Ceiling. The ratings could also be downgraded if both Denizbank's VR is downgraded, and the probability of support from Sberbank weakens.

Denizbank is mainly a retail and SME oriented commercial bank, providing a broad range of both banking and other financial services, including leasing and factoring. It is among the second-tier group of banks in Turkey, ranking tenth with a 3.1% share in total assets as of H112.