Announcement from Fitch about Turkish banks

Fitch, the credit rating agency has said that a capital increase may be required in some banks in the sector, as well as public banks that are going to raise capital. A statement regarding Turkey has been received from the credit rating agency Fitch.

In the statement, it was emphasized that capital increase might be required in some banks in the sector, as well as public banks that were going to increase their capital.

Speaking at Fitch’s webinar on Turkey, Fitch Director Lindsey Liddell said that capitalization in the banking sector would be susceptible to further depreciation, asset quality weakening or growth in the TL, noting that some banks that did not have sufficient buffers to support growth might also need capital.

INCREASED CREDIT RISKS

A capital support of close to TL 51 billion would be provided to Ziraat Bank, Vakıfbank, Halkbank and the Development and Investment Bank of Turkey (TKYB) through the Turkish Wealth Fund. Liddell stated that in recent years, especially the high loan growth provided by public banks, the uncertain macroeconomic outlook and the structured, large-scale close monitoring loans had increased the credit risks in the banking sector.