EM CEEMEA CREDIT: TURKEY: Fitch: Banks face ST pressure from higher rates
Jun-04 14:08
Republic of Türkiye (TURKEY; B1pos/BB-/BB-)
“*Fitch Ratings: Turkish Banks Face Short-Term Pressure from Higher Interest Rates” – BBG
- Fitch’s comments are broadly in line so not too meaningful or material for any of the banks under our coverage.
- Fitch commenting that NIM’s should contract ST due to higher lira deposit funding costs. Turkish banking liabilities generally reprice faster than assets, with no material increase in average loan book rates since April, despite loans being ST. The agency expects NIMs to improve later in the year as CBRT cuts rates, Fitch’s base case is 33% by end of 2025.
- Impaired loans expected to continue to rise but remain manageable. According to Fitch there doesn’t seem to be any evidence of pressure on banks’ access to external funding, since the volatility in March.
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