Turkey's Halkbank 'expects no capital adequacy decline on sovereign ratings change'

By bne IntelliNews January 27, 2017

Turkish state-owned lender Halkbank does not expect any possible change in Turkey's sovereign ratings to negatively impact its capital adequacy ratio, it said in a stock exchange filing made on January 24.

The bank explained that it could consider using alternative credit rating agencies acknowledged by banking regulator BRSA for the calculation of the capital adequacy ratio, thus it did not foresee a ratio deterioration.

Fitch Ratings is widely expected to downgrade Turkey when it announces the result of its county review on January 27, probably after the local market close.

Fitch affirmed Halkbank’s Long-Term Foreign Currency Issuer Default Ratings (IDRs) at 'BBB-' with a Stable Outlook in October 2015.

The capital adequacy ratio of Halkbank, one of Turkey’s largest banks by assets, stood at 13.5% as of the end of September 2016.

The lender’s net income increased 31.7% y/y to TRY2.64bn (€637mn) in the third quarter of 2016, while its NPL/total loans ratio was 3.1%, slightly below the sector average of 3.3%.

 

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