Moody’s acts on 17 Turkish banks

Moody's Investors Service said it downgraded the long-term ratings of Turkiye Is Bankasi AS, T.C. Ziraat Bankasi, Turkiye Garanti Bankasi AS, Akbank TAS, Yapi ve Kredi Bankasi AS, Turkiye Vakiflar Bankasi TAO, Turkiye Halk Bankasi AS, Turk Ekonomi Bankasi AS, ING Bank AS (Turkey), Alternatifbank AS, QNB Finansbank AS, HSBC Bank AS (Turkey), Denizbank AS and Odea Bank AS.

Moody’s affirmed the long-term ratings of Sekerbank TAS, Turkiye Sinai Kalkinma Bankasi AS and Export Credit Bank of Turkey AS.

The outlook on 12 banks was changed to stable from negative while the outlook on five other banks remains negative.

Moody’s said the actions were driven by (a) The weakened capacity of the Turkish government to provide support to the country's banks, reflected in the March 7 downgrade of Turkey's government debt rating to Ba2 with stable outlook from Ba1 with negative outlook; (b) Moody's lowering of its macro profile for Turkey to weak+ from moderate-; and (c) its view that the operating environment in Turkey will become more challenging in 2018.

The downgrade of Turkey's government debt rating was driven by Moody's view of (a) the continued loss of institutional strength; and (b) the increased risk of an external shock crystallizing, the agency explained.

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