JCR Eurasia Rating has affirmed Creditwest Bank Ltd.’s ratings of ‘AA+(Trk)’ on the LT National Scale and ‘BBB-(Trk)’ on the LT International Foreign Currency and Local Currency along with ‘Stable’ outlooks.(September 1, 2014)

JCR Eurasia Rating has affirmed the credit rating of ‘AA+ (Trk)’ along with a ‘Stable’ outlook to Creditwest Bank Ltd. on the Long Term National Scale, which denotes a very high investment grade. On the other hand, Creditwest Bank’s Long Term International Foreign and Local Currency Ratings have been affirmed as “BBB-“, in line with Turkey’s sovereign ratings. Other ratings and their details are given in the table below.
Long Term International Foreign Currency
:
BBB- /(Stable Outlook)
Long Term International Local Currency
:
BBB- /(Stable Outlook)
Long Term National Local Rating
:
AA+ (Trk) /(Stable Outlook)
Short Term International Foreign Currency
:
A-3 /(Stable Outlook)
Short Term International Local Currency
:
A-3 /(Stable Outlook)
Short Term National Local Rating
:
A-1+(Trk)/(Stable Outlook)
Sponsor Support
:
2
Stand Alone
:
A
Creditwest Bank’s upward trend initiated in the previous years was maintained in 2013, as the Bank achieved significantly better results in assets, loans, deposits and profit increases compared to the sector averages. Sustaining its uninterrupted growth without sacrificing asset quality and efficiency, the Bank was ranked the 3rd largest bank among 22 banks operating in the sector while becoming the largest private bank. The Bank’s sustainable income streams generated through core banking operations and the retention of internally generated resources funded the Bank’s continued growth and fortified its equity. The capital adequacy ratio exhibited a decline in the past 3 years as an expected result of strong loan growth and maintained its level below the Sector average level, despite staying reasonably higher than the legal threshold. Even though the capital adequacy ratio declined slightly, the Bank’s capitalization and liquidity levels are capable of covering the losses arising from volatilities in the macroeconomic indicators and incidental or systemic risks. The pressure on the liquidity management stemming from the less than 3 months maturity profile of deposits observed in the sector notwithstanding, the widespread deposit base and low credit to deposit ratios helped the liquidity management.
While the Bank’s non-performing loans ratio (NPL) was higher than the reference values, it was similar to that of the sector and exhibited considerable improvement in 2013 compared to the previous year. Provisioning for almost all impaired assets, successful collection rates for impaired loans, standardized business processes, rational organization structure and effective and accomplished management practices were evaluated as other positive factors. On the other hand, the persistence of tightening net interest margins in the sector pressurizes the profitability, whereas the Bank managed to compensate for this negativity with increased commission revenues to a certain extent.
The structural risk factors arising from the fact that the Turkish Republic of Northern Cyprus is a small, economically and politically isolated island country persevere for both Creditwest Bank and the Sector.
The Bank has been assigned a Sponsor Support Grade of (2) and a Stand Alone Grade of (A). According to JCR Eurasia Rating’s notation system, a Stand Alone Note of (A) denotes the institution’s ability to manage its risks and commitments without any outside assistance at “highest” level, and a Support Note of (2), denotes an “adequate” likelihood and quality of outside support.
For more information related to the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Şevket GÜLEÇ.
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