Fitch: Turkish banks to still access funds in 2018

LONDON

"The base case is that Turkish banks will continue to have good funding market access in 2018," Fitch Ratings said Friday.

“Our base case is that Turkish banks will continue to have good funding market access in 2018 and be able to largely roll over their foreign debt, [...]. Available foreign-currency liquidity should also mean they are well placed to cope with any potential short-lived market closure.” said Fitch Ratings Turkish Bank’s Outlook report for 2018.

The outlook for Turkish banks in 2018 is stable, reflecting Fitch Ratings' view that the still supportive economic backdrop and banks' significant capital buffers make them well placed to absorb further moderate shocks.

However it has been also noted that risks pertaining to performance, capitalization and foreign-currency liquidity remain high given geopolitical tensions and macro volatility.

Fitch also expects lending growth to slow moderately and profitability to weaken but still remain reasonable in 2018, in the absence of more stimuli.

The ratings agency also said that the level of non-performing loans (NPLs) would remain moderate, increasing modestly. However, market shocks or large individual NPLs could result in larger increases.