Fitch warns of tough year for banks
MOSCOW/LONDONBanking sector risks are rising in Turkey, but lenders in the country should be able to weather the difficulties, Credit rating agency Fitch has said.
“Turkish banks will face a tough year of weakening asset quality, tighter margins and lower growth … against a background of higher rates, a weaker currency, a slower economy and political uncertainty,”
Fitch said in the latest publication of its regular emerging market banking system data watch.
The agency said that most major emerging market banking sectors would perform more weakly in 2014 than in recent years due to slowing economies. The agency, however, added that even though downside risk was greatest in China and India, it had risen in Russia and Turkey.
Still, the agency said it remained confident about Turkish lenders. “Most [Turkish] banks can absorb moderate stress and downward rating pressure should be limited.”