LONDON – JPMorgan said it sees no signs of funding stress in Turkey’s banking system at present and recommended going overweight on some subordinated bonds issued by lenders Garanti and Akbank.
“We think credit risks in Turkey haven’t increased materially in the recent weeks,” JPMorgan’s Konstantin Rozantsev wrote in a note to clients published late on Thursday, adding stabilising market conditions offered higher upside on these bonds.
“There are no signs of a funding stress in the banking system at present. The bigger credit concern, in our view, is that the FX move can trigger deposit volatility or an external debt rollover issue, but these risks appear distant in our view.”
(Reporting by Karin Strohecker; editing by Dhara Ranasinghe)
