Turkey Leaves Europe’s Bankers Looking for Divine Help
Citi’s 2015 exit from the country seems wiser every day.
Is there any easy way for Europe's banks to clear out of Turkey?
Photographer: Arif Akdogan/BloombergTurkish President Recep Tayyip Erdogan has been standing firm as investors dump his country’s assets at an alarming pace, saying: “They have got dollars, we have got our people, our right, our Allah.” European banks with substantial investments in Turkey will hope some of that divine providence rubs off on them, too, after sticking with a bet that has gotten more perilous over time.
The rewards of operating in the country always seemed to outweigh the risk for European banks such as Spain’s BBVA SA and Italy’s UniCredit Spa, which are among the most-exposed lenders with about 63 billion euros ($72 billion) and 25 billion euros in risk-weighted Turkish assets respectively. Double-digit interest rates and a growing economy added up to lucrative profits, even in the face of a wildly unstable political environment and signs of runaway inflation.