... T.A.O.'s (Vakif) ratings are driven by its standalone creditworthiness, reflecting its solid franchise and generally reasonable financial metrics, but also consider its exposure to the volatile Turkish operating environment. The bank's ratings are underpinned by state support, reflecting its majority state ownership and systemic importance. Solid Franchise: Vakif had a market share of about 8% of sector loans, deposits and total assets at end-3Q17. Its franchise is underpinned by its long-standing existence, ownership, a large branch network that supports access to customers, and stable, local-currency deposit funding. Asset-Quality Risks: Vakif's asset quality is typically below state-owned peers'. Non- performing loans (NPLs, loans overdue by 90 days) were a fairly high 4% of gross loans at end-3Q17, while watch-list loans, which could result in new NPLs as loans season, amounted to a further 4%. Credit risk is heightened by high,...
