Moody's Investors Service has placed the D financial strength rating (FSR) of Turkiye Vakiflar Bankasi (VakifBank) on review for a possible downgrade. The review stems from the recent failure to privatize the bank within the timeframe agreed between the government of Turkey and the World Bank as part of the World Bank's PFPSAL I program and from Moody's expectations that asset quality may have deteriorated substantially during 2001 relative to VakifBank's equity base.
Moody's stated that recent attempts by the Turkish government to sell any bank in Turkey have been difficult. In addition, Moody's also noted that the recent take-over of PamukBank by the Turkish authorities may have been in factor in the withdrawal of some banks from the privatization of VakifBank.
Nonetheless, the lack of interested bidders for the bank may also convey information concerning the fundamental credit strength of the institution, says Moody's. In addition, without a strong strategic bank partner, Moody's is concerned regarding the ongoing viability of the institution over the long-term.
The rating agency also noted that VakifBank had reported deteriorating asset quality figures at year-end 2000, in advance of the recent severe economic downturn in Turkey during 2001.
Moody's stated that the review will evaluate the franchise potential for the bank as a stand-alone institution and will assess the year-end 2001 annual results of the bank, once published, and incorporate developments within the bank during 2002. Turkiye Vakiflar Bankasi TAO, headquartered in Ankara, Turkey reported assets of $7.56 billion as of 31 December 2000. — (menareport.com)
© 2002 Mena Report (www.menareport.com )