By Asli Kandemir and John O’Donnell
ISTANBUL/FRANKFURT, July 19 – 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 the United Kingdom have the largest credit exposure to the country, 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. To see a chart, click on: http://tmsnrt.rs/29SXWrb
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 reported in June that Sberbank, Russia’s biggest bank, had been considering selling its Turkish unit Denizbank. 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.