London-based rating agency Fitch Ratings revised Turkey's 2018 GDP growth forecast as 3.9 percent on Thursday, cutting down from its earlier forecast of 4.1 percent.
Fitch said that investigations by U.S. authorities into a group of Turkish traders and bankers accused to helping Iran evade sanctions could put Turkish banks' ratings under further pressure if the situation escalates.
"Given the noise around the U.S. investigations, if there was a case of reputational damage resulting in diminished access to market or a large fine that wasn't offset by state support, it could result in negative rating pressure," said Lindsey Liddell, Fitch's director of financial institutions.
U.S. prosecutors have charged Reza Zarrab with engaging in hundreds of millions of dollars of transactions on behalf of Iran's government and other Iranian entities, which were barred by U.S. sanctions. Zarrab also allegedly laundered the proceeds and defrauded several financial institutions by concealing the true nature of his illegal transactions, according to U.S. authorities.
Turkey's former Economy Minister Zafer Çağlayan, who is also the former general manager of state-owned Halkbank, Süleyman Aslan and two others have been charged as well for conspiring to evade U.S. sanctions on Iran.
Liddell added that capital buffers in the Turkish banking sector were currently "sufficient to absorb moderate shocks."
"However, risks to bank capitalization remain in the event of further lira devaluation or higher than expected non-performing loan growth."
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