Turkey's banking system outlook seen stable to positive - Moody's

MUMBAI (Thomson Financial) - The overall outlook for rated Turkish banks remains stable to positive as they benefit from favourable profitability and franchise development dynamics, Moody's Investors Service said in its new banking system outlook for Turkey.

'We believe that within the context of the currently favourable profitability dynamics and the projected growth of the Turkish banking market, banks can continue to prosper without altering their risk profiles,' Moody's analyst George Chrysaphinis said. 'The operating environment remains risky, however, and banks will need to maintain modest risk appetites if ratings are to rise beyond their current levels,' he added.

Moody's said its review in April 2007 resulted in a rise in most banks' bank strength financial ratings (BSFRs), with the weighted average now at 'D+', up from 'D', prior to the review. The local currency and foreign currency deposit ratings remain capped at 'A3/P-2 and 'B1/Not Prime'.

The investors service said notwithstanding certain concerns, the current financial health of the banking sector, the strong franchise fundamentals and good management of Turkish banks can form the basis for further profitable growth. [e-mail] rsh/jro COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.