BBVA says commitment to Turkey unchanged, shares fall 6%

Publish March 23, 2021

The sacking of Naci Agbal sparked fears of a reversal of recent rate hikes and increased market volatility

MADRID: Spain’s BBVA on Monday said its commitment to Turkey was unchanged despite a 15 percent decline in Turkey’s lira to a near all-time low after President Tayyip Erdogan’s ousting of a hawkish central bank governor.
The sacking of Naci Agbal, appointed less than five months ago, sparked fears of a reversal of recent rate hikes and increased market volatility.
Shares in BBVA, which makes around 14 percent of its profits in Turkey through its 49.9 percent-owned Turkish unit Garanti, plunged as much as a 7.7 percent.
At 1023 GMT, shares in BBVA fell by 6% to 4.4 euros in Spain’s stock exchange, wiping off around 2 billion euros of its market value.
“BBVA’s commitment to Turkey is unchanged,” a BBVA spokesman told Reuters, adding that the impact of a 10% decline of the lira versus euro had only 2 basis points impact on its capital.
In the fourth quarter, BBVA’s net profit in Turkey fell 51.5 percent to 61 million euros.
BBVA has already been actively hedging on the foreign exchange markets to protect its earnings and capital from any potential headwind from Turkey.
A spokesman for BBVA said that the lender’s maximum risk in Turkey was limited to its book value with no intra group funding.
As of December, BBVA’s Garanti book value was 3.6 billion euros.
This was the third time since mid-2019 that Erdogan — who has repeatedly called for low rates — has ousted a bank governor and caused another credibility blow to the central bank.


Latest Stories

Irish dairy farmers' milk donations raise over €100k for famine-hit Yemen

2020-11-16 06:00:00

A campaign to encourage Irish dairy farmers to raise funds for those affected by war and famine in Yemen has so far raised more than"...
Read More

Two service projects begin in capital Sana'a

2020-11-10 04:00:00

SANA'A, Nov. 09 (Saba) - Deputy Prime Minister for Services and Development Affaires Hussein Maqbouli and capital Sana'a"...
Read More

Tamkeen Development Program: Empowering Yemeni Communities

2020-11-01 04:00:00

The conflict in Yemen has caused immense suffering and financial devastation in disadvantaged communities, leaving many dependent"...
Read More

Hodeida distributes solar systems for IDPs

2020-10-26 05:00:00

HODEIDA, Oct. 25 (Saba) - Hodeida province has started inaugurating the distribution of solar energy systems for internally displaced"...
Read More