Moody’s: Turkey's Banking Sector Outlook to Remain Negative as COVID-19 Impacts Credit Profiles

Moody’s Investor Services (Moody’s) has stated in a recent report that it expects the outlook on Turkey’s banking sector to remain negative due to the impacts of the COVID-19 pandemic, which is expected to cause a reduction in the repayment capacity of borrowers and an increase in default facilities.

Moody’s added that it anticipates the profit levels of Turkish banks to erode, driven by lower lending volumes and increased provisions, whilst an additional impact from the depreciation of the TRY is also expected. The rating agency expects that supportive measures taken by the Government of Turkey will not fully revive the credit portfolio of Turkish banks. 

Acc...