S&P lowers Albaraka Turk

S&P said it lowered the long-term counterparty credit rating on Albaraka Turk Katilim Bankasi to BB- from BB.

The agency also said it affirmed the B short-term counterparty credit rating, lowered its long-term Turkey national scale rating to trA+ from trAA- and affirmed the short-term Turkey national scale rating at trA-1.

S&P also said it lowered the issue rating on the subordinated sukuk issued by Albaraka Turk subsidiaries, Albaraka Sukuk Ltd. and ABT Sukuk Ltd. to B- from B.

The agency also said it lowered the rating on Bereket Varlik Kiralama Anonim Sirketi's sukuk to BB- from BB.

The outlook is stable.

The downgrades reflect the continued deterioration in Albaraka Turk's capital, S&P said.

The agency said it forecasts the bank's risk-adjusted capital ratio to remain at less than 5% in the next 12 months thanks to growth in risk assets outstripping core equity.

While the bank's credit growth is expected to moderate, it is likely to remain above the system average for the next 12 months, S&P said.

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