Fitch cautions Turkish banks for challenging year ahead

"Solid capital and profitability buffers mean the outlook remains stable" for Turkish Banks

Fitch cautions Turkish banks for challenging year ahead

World Bulletin/News Desk

Turkish Banks are likely to be challenged in 2015 by slowing economic growth, fierce competition for deposits and mild deterioration in asset quality, the credit ratings agency Fitch said on Thursday.

“Modest economic growth, competition for deposits and moderate asset quality deterioration will create a tough operating environment for Turkish banks in 2015, but solid capital and profitability buffers mean the outlook remains stable,” Fitch said in a press release on its website.

Fitch warned that “increased reliance on short-term, foreign-currency funding represents the biggest risk to the outlook.”

Stressing Turkish banks’ foreign-currency liabilities have tripled since 2008 and increasingly shifted towards short-term loans, Fitch said that this has significantly increased the potential impact of an abrupt change in investor sentiment.

“However, we believe that under most scenarios foreign-currency liquidity would be sufficient," Fitch said.

Last Mod: 18 Aralık 2014, 15:08
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