February 25, 2019 / 3:20 PM / 8 months ago

Turkey's measures to increase state banks' loan growth credit negative - Moody's

ISTANBUL, Feb 25 (Reuters) - Moody’s said on Monday recent measures by Turkey to increase loan growth from state banks are credit negative for banks.

The ratings agency said the moves by three state-owned banks to offer some loans at below market rates or current inflation levels, as well as government requests to sustain lending, “add unseasoned risk, and negatively affect margins”.

Moody’s highlighted a decision by Vakifbank last week to cut rates on car loans, mortgages and general consumer loans below annual inflation rates, and Ziraat Bank and Halkbank’s participation in a government plan to provide loans at below market rates to people struggling to pay credit card debts. (Reporting by Can Sezer and Sarah Dadouch Editing by Dominic Evans)

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