...Standalone Creditw orthiness Drives Ratings : Akbank T.A.S's ratings are driven by its Viability Rating (VR) reflecting its exposure to the high-risk Turkish operating environment. They also reflect its solid franchise, record of reasonable financial metrics and moderate capitalisation. The Negative Outlook on the bank's Issuer Default Ratings (IDRs) reflects the potential for the w eaker operating environment to place greater pressure on its financial metrics than already observed. Asset-Quality Pressures: Credit risk is heightened by the w eaker grow th outlook in Turkey, high foreign-currency (FC) lending (end-1H19: 44% of gross loans), given the Turkish lira depreciation, high interest-rate environment, single-name borrow er risk, high Stage 2 loans and risky sectoral exposures (including construction and real estate). Non-performing loans (NPLs; loans overdue by 90 days) rose to 4.5% at end-1H19 and Stage 2 loans to 14%. Further asset- quality w eakening is likely, although loan restructurings...
