Moody’s downgrades Sekerbank

Moody's Investors Service said it downgraded the long-term local and foreign-currency deposit ratings of Sekerbank TAS to Ba3 from Ba2.

The short-term local and foreign currency deposit ratings at Not-Prime were affirmed.

The standalone baseline credit assessment (BCA)/adjusted BCA was downgraded to b1 from ba3, as was the bank's long-term counterparty risk assessment (CR assessment) to Ba2(cr) from Ba1(cr). The short-term CR assessment was affirmed at Not-Prime.

The outlook on the long-term deposit ratings is negative.

The national scale long-term deposit rating was downgraded to Baa1.tr from A3.tr and the short-term deposit rating of TR-2 was affirmed.

Moody’s said the downgrade of Sekerbank reflects: (a) higher asset risk (stemming from the small and medium-sized enterprise portfolio and sector concentrations), leading to higher non-performing loans and an elevated cost of risk; (b) a material decline in profitability driven by higher loan loss provisioning costs and an increased cost of funding; (c) a reduction in Tier 1 capitalization; and (d) an increasing reliance on confidence-sensitive market funding.

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