LONDON, March 14 (Reuters) - Ratings agency Moody’s said on Thursday that Turkey’s move to lower the interest rate cap for public institution deposits at state-owned banks was credit positive and will reduce funding costs for lenders such as Ziraat Bank, Halkbank and Vakifbank.
Moody’s has a negative outlook on Ziraat Bank, Halkbank and Vakifbank - the first, third and seventh largest banks in the country respectively.
“For the three banks, we estimate that the interest they pay on public institutions’ deposits will decline by 1 percent, lowering the cost of deposits in Turkish lira by 10-15 basis points,” Moody’s said in a note to clients.
“We estimate that the three banks will save 600 million Turkish lira ($110 million) in aggregate because of the lower rate cap, or 2 percent of the banks’ consolidated pre-tax profit for 2018,” Moody’s said, adding Vakifbank would be the biggest beneficiary.
($1 = 5.4748 liras)
Reporting by Karin Strohecker; Editing by Tom Arnold