Banks Association of Turkey (TBB) Chairman of the Board Hüseyin Aydın said on Friday that they do not agree with the negative valuations of the Turkish banking sector, which he said is capable of withstanding reasonable risks and unexpected shocks. Aydın issued a written announcement about the international rating agency Moody's "Report on the Turkish Banking Sector" and said that the report evaluates developments in global markets and in Turkey on the banks' transactions. The report said that resource costs have increased in international money and capital markets and that inflation rates are still high in Turkey, while the growth rate of national income and the credit growth rate have slowed. Aydın underlined that while the report said such developments increase the credit risks of banks and decrease profitability, the sector can manage rising risks and unexpected shocks due to its strong equity structure as long as macroeconomic stability is preserved and growth continues. While the Moody's report said that non-performing loans might increase, Aydın said that within the current risk management approach applied in the Turkish banking system, such risks could be easily absorbed. "The stress tests performed by the same institution also show that the sector is strong against risks," Aydın said. He further pointed to the importance of decreasing public charges that increase brokerage costs and that with recent precautions, macroeconomic risks have been balanced and further, focus has been paid to high capital adequacy. Aydın also said that opportunities and flexibilities allowed by international rules should be granted to cover the credit requirements of the real economy to finance economic growth and to preserve a healthy economic structure.
