Fitch rates BKT bank ‘B’ with negative outlook

TIRANA, March 12 – Fitch Ratings, one of the top three international rating agencies, has rated Albania’s BKT bank’s long-term issuer default ratings (IDRs) of B with a negative outlook and a viability rating of B.
In Fitch’s view, support from BKT’s parent and from the Albanian state is possible but cannot be relied upon. The bank’s Support Rating Floor of ‘No Floor’ reflects uncertainty about the sovereign’s willingness to bail out failed banks, limited sovereign financial flexibility, the foreign ownership of BKT and risks related to corporate governance issues.
The viability rating (VR) reflects BKT’s exposure to weak operating environments in Albania and Kosovo, high levels of moderately reserved non-performing loans (NPLs), risks related to rapid recent loan growth including outside its home markets and potential contagion risks from the bank’s ultimate owner through related party transactions. BKT’s capitalisation is moderate given the structure of the bank’s assets, loan book concentrations, unreserved NPLs and the potential for further asset quality deterioration.
BKT’s solid domestic market position, healthy liquidity and limited refinancing risks are positive for the bank’s ratings.
BKT has been majority-owned since 2006 by Calik Holdings (Calik), a privately-owned Turkish holding company engaged in various businesses, mainly in its home market. BKT was the second-largest bank by total assets and customer deposits and loans in the relatively small Albanian banking sector at end-2013.