Moody's: YapiKredi view negative

Moody's Investors Service said it changed the outlook on the D+ standalone bank financial strength rating, equivalent to a Ba1 baseline credit assessment, of Yapi ve Kredi Bankasi AS to negative from stable.

Concurrently, Moody's affirmed the bank's D+ bank financial strength rating; Baa2 long-term and Prime-3 short-term local-currency deposit ratings; Baa2 long-term foreign-currency senior and the Ba1 long-term foreign-currency subordinated debt ratings; and its Ba2/NP long and short-term foreign-currency deposit ratings.

All debt and local-currency deposit ratings already carry a negative outlook. The foreign-currency deposit rating, which is constrained by Turkey's foreign-currency deposit ceiling, carries a stable outlook.

YapiKredi's long and short-term Turkish national scale ratings of Aa3.tr long-term and TR-1 short-term ratings are unaffected.

Moody's said the outlook change was driven by the fact that YapiKredi's risk-adjusted profitability indicators - namely, pre-provisioning income and net income over average risk-weighted assets of 3.6% and 1.6%, respectively (based on audited FYE 2012 financials) and 4.3% and 2.4%, respectively (based on three year average) - lag behind its peers and the system average, which in the agency's opinion will constrain the bank's ability to supplement its capital needs required to internally fund its franchise growth aspirations.

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