S&P: Ratings on Turkey unaffected by Bank Asya takeover

The Turkish banking regulator's decision to take over the management of Bank Asya did not affect the country's credit ratings, Standard & Poor's announced Feb. 6.

"The decision to transfer management of Bank Asya to the Savings Deposit Insurance Fund does not affect the unsolicited sovereign credit ratings on Turkey," the U.S.-based credit ratings agency said in a press release.

Turkey's current credit rating stands at BB+ with a "negative" outlook.
      
"We view this decision as an isolated incident and not a harbinger of systemic distress in the banking sector or a determined politicization of Turkey's regulatory institutions," the statement said. "At present, we do not see the potential for systemic distress. Bank Asya's relatively small size (roughly 0.1% of banking sector assets) makes it rather unlikely that there could be any contagion effects."

Turkey's Banking Regulation and Supervision Agency ruled late Feb. 3 to seize control of Bank Asya, citing lack of transparency.

The bank is allegedly affiliated with U.S.-based Islamic cleric Fethullah Gülen and his movement. The Turkish government accuses its ally-turned-nemesis Gülen and his followers of forming an illegal "parallel state."

Following the Bank Asya takeover, the United States had called on all governments to ensure the monitoring of corporate and financial activity is done in line with international legal standards. 

"Well, obviously this is a Turkish issue, so the Turkish authorities are probably best to speak to this specific case. But broadly speaking, we look to governments, including Turkey, to ensure that monitoring of corporate and financial activity is done in accordance with international legal standards," said deputy...