Fitch praises Turkey's strong banking sector

A strong economy and resilient banking sector will likely attract more foreign banks seeking Turkish bank acquisitions this year, Fitch Ratings said in a written statement on Monday. "Turkey's medium-sized banks are the most likely acquisition targets because of uncertainty about the long-term sustainability of their operations as independent entities. … The sector's healthy credit fundamentals, market size [including a large bankable population] and the broadly favorable outlook for Turkey's economy make it particularly attractive," Fitch said. Fitch cited good liquidity, held up by a stable retail deposit funding base, low leverage, still wide margins by international standards and strong credit demand as factors for Turkey's strong banking sector. "But a return to rapid loan growth could lead to a build-up of risks in the system," it added.