���������ֳ�

QJD Buffer; Uplift to IDR: Fibabanka Anonim Sirketi’s (Fiba) Long-Term Issuer Default Ratings (IDRs) and senior debt rating of ‘B+’ are rated one-notch above the bank’s Viability Rating (VR), due to the large buffer of qualifying junior debt (QJD), in the form of additional Tier 1 (AT1) and other subordinated debt instruments. This buffer was equivalent to 10.6% of risk-weighted assets (RWAs) at end-1Q21 (10.1% excluding regulatory forbearance) and would protect senior creditors in the event of the bank’s failure, including due to a capital shortfall. The Negative Outlook on the Long-Term IDRs primarily reflects risks to Fiba’s credit profile from operating environment pressures given the implications for its financial metrics. It also reflects a significant risk that Fiba’s QJD buffer could fall below 10% of RWAs as regulatory forbearance wanes, and due to higher-than-expected growth and lira appreciation. This also, however, depends on the size, nature and timing of any capital-strengthening measures. Small Franchise, Moderate Growth: Fiba has a small franchise (end-1Q21: 0.5% of sector assets) and limited competitive advantages in the volatile Turkish operating environment. Its moderate loan growth record (2020: 19%; 6% FX-adjusted) reflects a cautious approach amid challenging market conditions and capital preservation efforts. Fiba’s short-term strategy is to grow unsecured retail loans - underpinned by digital and ‘ecosystem banking’ - and lira business loans.High Asset-Quality Risks: Fiba’s impaired loans (NPL) ratio (end-1Q21: 3.4%; including 20bp forbearance uplift) is below the sector average (3.8%) but should be viewed in light of significant NPL sales and write-offs (2019-1Q21: a cumulative 2.7% of gross loans) and high Stage 2 loans (15%; over half restructured). Total reserves fully cover NPLs. The latter are likely to rise in 2021-2022 given waning government stimulus, maturing loan deferrals (end-1Q21: 12% of gross loans) and concentrated exposure to the risky construction, real estate and tourism sectors.Moderate Profitability: Fiba’s operating profitability (1Q21: 1.8% of RWAs; 2020: 1.5%) is moderate and typically below-average, primarily reflecting its lack of scale and limited revenue diversification. Likely moderate net interest margin (1Q21: 3.8%) erosion and high impairments (1Q21: 39% of pre-impairment profit) will continue to put pressure on performance in 2021.