...Parental Support Drives IDRs: The IDRs of Yapi ve Kredi Bankasi A.S. (YKB) are driven by potential institutional support from UniCredit S.p.A. (UC; BBB+/Negative/bbb+). UC is a strategic shareholder in YKB, with a 50% stake in a holding company that controls 82% of YKB. UC and its Turkish partner, Koc Group, have equal voting rights and representation. Tough Operating Environment: The operating environment for Turkey's banks is increasingly tough, affected by regulatory changes, slowing credit demand, sharp interest rate movements, exchange rate volatility and political pressures. Changes in international investor sentiment toward emerging markets also represent a potential risk. However, YKB has performed well through different cycles to date. Smallest Among Peers: YKB controls a deposit market share of around 9.6%. Compared to its peers, all of which share the same Viability Rating (VR), it is the smallest bank. Key asset quality and core capital adequacy metrics are on the low side compared...
