JCR Eurasia Rating has affirmed the ratings of Nurol Yatırım Bankası A.Ş. and Cash Flows Relating to the Planned Bond Issues ‘at ‘AA(Trk)’ on the Long Term National Local Scale and ‘BBB-‘ on the Long Term International Foreign Currency.

JCR Eurasia Rating has evaluated Nurol Yatırım Bankası A.Ş. in a high-level investment category and affirmed its Long Term National Local Rating to “AA (Trk)”. Its Long Term International Local Currency has been affirmed at ‘BBB ‘, positioned above the country ceiling-. Other notes and details of the ratings are given in the table below:

Long Term International Foreign Currency

:

BBB- /( Stable Outlook)

Long Term International Local Currency

:

BBB /( Stable Outlook)

Long Term National Local Rating

:

AA (Trk) /( Stable Outlook)

Long Term Issue Rating

:

AA (Trk)

Short Term International Foreign Currency

:

A-3 /( Stable Outlook)

Short Term International Local Currency

:

A-3 /( Stable Outlook)

Short Term National Local Rating

:

A-1 (Trk)/( Stable Outlook)

Short Term Issue Rating

:

A-1 (Trk)

Sponsor Support

:

1

Stand Alone

:

AB

Nurol Yatirim Bankasi is a small scale investment bank established in 1999 as a subsidiary of Nurol Holding A.Ş.. Holding has engaged in the sectors of construction, defence, finance, tourism, health, mining, real estate, marketing and manufacturing through 33 companies within the Nurol Group, 4 joint ventures and 11 domestic-foreign associates and subsidiaries. Nurol Bank carries out capital markets and banking operations in terms of “high-standard and custom solutions” for construction and contracting sectors in the roads and infrastructure contracting services particularly Nurol Group, infrastructure investment projects as well as transportation, energy and other sub-sectors related to them to assess the suitability of investment projects as providing cash and non-cash corporate finance solutions.

The Bank, which has been affected minimally from the sector’s profitability erosion and gained the early adaptation capability to a changing financing structure, began to benefit from the positive impacts of remodelling operations and cost effectiveness initiated in 2013 in line with the strategy of sustainable profitability rather than asset size. The Bank’s net interest margin over the sector averages and net positive effect of possible regulatory changes and CET1 absorb incidental losses support sustainability. In line with the increase in the NPL ratio of the sector overall, despite the bank's non-performing loan ratio increased compared to the previous year, a large portion of NPLs have been transferred to the asset management company on revenue sharing model. The dynamic nature of the Bank's management against to the aftershocks and the crisis, effective risk management, asset quality, qualified staff force and high-tech development have played an effective role in the affirmation of Short and Long Term National Ratings and the assignment of the stable outlooks. No separate issue rating report has been prepared as the resources obtained via the debt issue will be carried in the Company’s balance sheet and issue rating analysis has been carried out in the credit rating report. The issue has no difference in comparison to the Company’s other liabilities with respect to legal status and collateralisation structure as such the Company’s corporate credit ratings also reflect the issue rating.

On the other hand, the increase in the financial expenses and the decline in net interest margin in the sector overall, high levels of concentration in the corporate loans, below-the-sector-average capital adequacy ratio despite being above the legal limit, unavailability of the advantages of retail banking and the high levels of fluctuation, deterioration in the debt roll-over capacity of real sector companies and cyclical problems considerably increase the upward level risks.

The banking sector is expected to continue to be supported in the coming period by the CBRT monetary policy in a systematic liquidity and profitability. JCR Eurasia Rating is of the opinion that, regardless of the support of the shareholders, in the absence of serious disturbances in current market conditions and taking into account the Bank’s balance sheet composition, asset quality, growth projection, shareholder structure, level of institutionalism and restructuring, the Bank has the sufficient experience, capital and liquidity level to manage the undertaken liabilities, regardless of the support received from shareholders. The Bank has been assigned a Sponsor Support Grade of (1) and a Stand Alone Grade of (AB). In JCR Eurasia Rating’s notation system, a Stand Alone Note of (AB) denotes the institution’s ability to manage its incurred risks without any outside assistance at a “High” level and a Support Note of (1), denotes a “Strong” probability of outside support.

For more information, related to the rating results you may visit our internet site http://www.jcrer.com.tr or contact with our chief analyst Mr. Orkun İNAN.

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