Moody’s might cut 17 Turkish Banks

Moody's Investors Service said it placed the ratings of 17 Turkish banks under review for downgrade following a failed coup attempt last week in Turkey and the related placement of the Turkish sovereign rating under review for downgrade.

The following banks were placed under review: Akbank TAS, Alternatifbank AS, Burgan Bank AS, Denizbank AS, Export Credit Bank of Turkey AS, Finansbank AS, HSBC Bank AS (Turkey), ING Bank AS (Turkey), Sekerbank TAS, T.C. Ziraat Bankasi, Turk Ekonomi Bankasi AS, Turkiye Garanti Bankasi AS, Turkiye Halk Bankasi AS, Turkiye Is Bankasi AS, Turkiye Sinai Kalkinma Bankasi AS, Turkiye Bakiflar Bankasi TAO and Yapi ve Kredi Bankasi AS.

Moody’s said the review for downgrade of the banks' ratings is driven by the need to assess risks arising from the evolving political and economic situation, namely: (a) The potential weakening of the government's capacity and willingness to provide support to the banks in case of need, as implied by the review for downgrade on the sovereign rating; and (b) the risk of further deterioration in the domestic operating environment, which could affect the banks' financials, as potential increases in the cost of funding, reduced profitability, more limited capital generation capacity and weakening asset quality could weigh on results over the coming quarters.

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