UPDATE 1-Moody's lifts four Turkish bank ratings, cuts 10

ISTANBUL, Nov 9 (Reuters) - Moody's Investors Service said on Monday it upgraded four Turkish banks' stand-alone ratings because of strong "fundamentals" and their continued profitability despite a record economic contraction. The ratings agency also said it downgraded the long-term local-currency debt and deposit ratings of 10 banks, because it has revised the way in which it assesses government support for lenders and not because of their "intrinsic" performance". Moody's upgraded the ratings of Isbank, Turkey's biggest private bank, and Vakifbank, as well as two unlisted lenders: Anadolu Bank and the state-run Ziraat Bank, the country's largest bank. "The upgrades ... reflect the entities' strengthening financial fundamentals and earnings resilience in the midst of the global recession, which has plunged the local economy into a steep downturn over the past year," Moody's said. Turkey's export-oriented economy shrank 14 percent in the first quarter and 7 percent in the second, its worst recession on record. But banks have remained profitable as the central bank reduced interest rates by 1,000 basis points since November, slashing funding costs, to stimulate the economy. Banks whose ratings for local-currency debt and deposits were lowered include Isbank, as well as the second- and third-largest publicly traded lenders, Garanti and Akbank. The downgrades "do not reflect any deterioration in the intrinsic strength or operating performance of the affected entities," Moody's said in an e-mailed statement. "The rating agency continues to believe that the Turkish government has a strong willingness and ability to support its banks, if needed. However, the changes are part of Moody's global reassessment of systemic support," it said. (Writing by Ayla Jean Yackley; Editing by David Cowell) Keywords: TURKEY BANKS/MOODYS ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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