Fitch Downgrades Long-Term Foreign Currency IDR of Vakif Katilim, Viability Rating Upgraded and Outlook Negative

Vakif Katilim Bankasi (VKB)’s Long-Term Foreign Currency Issuer Default Rating (LTFC IDR) has been downgraded to B from B+ by Fitch Ratings (Fitch), with a Negative Outlook. Both the downgrade of the LTFC IDR as well as the Negative Outlook reflects Turkey’s weak foreign currency reserves position, and hence the reduced ability to support VKB in case financial assistance is required. This has driven down VKB’s Support Rating Floor to B from B+, which means that the LTFC IDR is now based on the Viability Rating (VR).

In addition, the Negative Outlook also reflects the significant risks to VKB’s stand-alone credit profile as a result of the on-going COVID-19 pandemic, and the impending economic downt...