Foreign banks stand to lose from Turkey coup fallout

Foreign banks have invested heavily in Turkey, leaving them exposed to any jolt to confidence as the country purges police, military and the judiciary following a failed military coup.  

 

France and Britain have the largest credit exposure to Turkey, central-bank data from the end of last year shows, while banks including UniCredit, BBVA and HSBC are among those with big operations or investments.   

 

France's exposure of roughly $40 billion, more than twice that of the United States, as well as that of Germany and Italy illustrate how Europe's already fragile banks stand to lose most.  

 

Once viewed as an attractive market with strong growth and a young population, Turkey's economy has recently been slowing.    

 

Some European banks had attempted to sell out. Britain's HSBC in February abandoned plans to sell its Turkish operation after poor offers.       

 

Reuters had reported in June, citing four banking sources, that Sberbank, Russia's biggest bank, had been considering selling its Turkish unit Denizbank. Sberbank denied that there were any such plans.

 

Unicredit, too, had said it could trim stakes in subsidiaries including Turkey's Yapi Kredi Bank.

 

Events in recent days will make any such move far harder.