Fitch Changes Credit Outlook for Nine Turkish Banks to "Positive"
The international credit rating agency announced the upgrade while affirming Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDRs) at "BB-" for all nine lenders.
Fitch said in a statement that the credit rating outlook for nine Turkish banks has been changed from "stable" to "positive," and their Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDRs) have been confirmed at "BB-."
Sovereign Upgrade Drives Banking Sector Boost
The ratings shift mirrors Fitch's recent action on Turkey's sovereign credit profile, reflecting accelerated foreign exchange reserve accumulation beyond agency projections.
"The Outlook change mirrors a recent similar action on Turkiye's 'BB-' LT IDR. The revision of the sovereign's Outlook reflects further reduction in external vulnerabilities following a faster-than expected rise in foreign exchange (FX) reserves since our upgrade in September 2024, the improved quality of reserves and a fall in FX contingent liabilities," Fitch said.
The agency highlighted enhanced reserve quality alongside diminished foreign exchange contingent liabilities as key factors supporting the positive reassessment.
Nine Major Institutions Receive Upgraded Outlook
Fitch upgraded the outlooks of the following banks: Ziraat Bank, Türkiye Emlak Participation Bank, Halkbank, Turk Eximbank, Development and Investment Bank of Türkiye, the Industrial Development Bank of Türkiye (TSKB), VakıfBank, Vakif Participation Bank, and Ziraat Participation Bank.
The institutions represent a cross-section of Turkey's banking landscape, including state-owned commercial banks, development finance institutions, and Islamic participation banks. The outlook revision signals improved creditworthiness prospects over the rating agency's projection horizon while maintaining current rating levels unchanged.
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