Moody’s Downgrades Ratings of 9 Banks in Turkey to B2

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International credit rating agency Moody's has downgraded the foreign currency deposit ratings of nine banks operating in Turkey from B1 to B2.

While the rating B1 means "speculative," B2 means "very speculative."

The banks whose deposit ratings have been downgraded are as follows: Akbank, Alternatifbank, ING Bank, QNB Finansbank, Ziraat Bank, Türk Ekonomi Bank, Garanti Bank, Türkiye Vakıflar Bank and Yapı ve Kredi Bank.

As the rationale behind the downgrading, Moody's has stated, "The downgrades are driven solely by the lowering of Turkey's foreign currency deposit ceiling and do not reflect bank-specific credit considerations."

Moody's previously lowered Turkey's deposit rating

On September 24, Moody's also lowered Turkey's country ceiling for long-term foreign currency bank deposits from B1 to B2, stating that there is a "risk that the government places constraints on deposit holders' access to their foreign currency deposits."

On June 2, another international credit rating agency Fitch also placed 25 banks in Turkey on Rating Watch Negative (RWN), stating that the decision in question "reflects risks to their performance, asset quality, capitalisation and, in most cases, liquidity and funding profiles." (HK/SD)