S&P lowers Albaraka Turk view to negative

S&P said it revised the outlook on Albaraka Turk Katilim Bank to negative from stable and affirmed the B long-term issuer credit rating and B short-term issuer credit rating.

Adverse business conditions and high lira volatility in Turkey are challenging the bank's capitalization, asset quality and liquidity, the agency said.

The outlook revision reflects a view that Albaraka Turk's financial profile, specifically its capitalization, liquidity and asset quality, might suffer more than initially anticipated from the prolonged deterioration in the domestic operating environment, S&P said.

Strong lira volatility, the sharp increase in interest rates and high inflation have proven more problematic for participation banks, which have fewer instruments to support profitability than traditional financial institutions, the agency said.

Such constraints include the lack of inflation-linked securities, less competitive deposits in times of increased interest rates and limited opportunities to pass on higher funding costs, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.