Fitch assessed the risks of Turkish banks after the earthquake

The international credit rating agency Fitch Ratings assessed the ratings of Turkish banks after the earthquake in its report released today.

Fitch stated that there may be an increase in non-performing loans from Turkish banks after the earthquake. However, the institution indicated that credit ratings are unlikely to be affected due to limited credit risks in the areas most affected by the earthquake and the current low rating levels.

According to the report, growth is expected to slow in the first quarter due to the earthquakes and pick up in the third quarter with increases in spending and reconstruction activities.

GRADES ARE NOT POSSIBLE TO AFFECT

“Turkish banks will experience an increase in non-performing loans due to the February earthquakes, but the ratings are unlikely to be affected given the limited exposure of most banks in earthquake-affected areas and current low levels. rating,” the Fitch Ratings report said. .

The report also indicated that banks’ asset quality will deteriorate with the broader economic repercussions of the earthquakes, and this situation can be alleviated with government support for individuals and businesses.

COMMERCIAL LOANS LESS

The following statements were included in the report:

“As of the end of 2022, the regions affected by the earthquake accounted for approximately 9 percent (700 billion TL or 37 billion USD) of the overall credit risk of the banking sector. However, the three provinces most affected by the earthquake (Hatay, Adıyaman and Kahramanmaraş) account for only about 2.4% of this rate.

The risks for individual clients may be higher due to their greater concentration in the region. Around three quarters of the loans in the region are granted to individual clients. Most of them are located in areas less affected by the earthquake. However, some businesses may be severely affected, which may affect some refunds.”