Fitch Raises Ratings of Turkish Banks: Improving Operating Conditions

Fitch Ratings Upgrades Turkish Banks' Ratings

The international credit rating agency Fitch Ratings made an important decision, stating that the operating environment for banks in Turkey has improved. Fitch raised the long-term foreign currency issuer default ratings of prominent Turkish banks such as Ziraat Bankası, VakıfBank (#VAKBN), Türkiye Sınai Kalkınma Bankası (#TSKB), Halkbank (#HALKB), Emlak Katılım Bankası, and Vakıf Katılım Bankası.

Ziraat, Vakıfbank and TSKB Ratings Increased

According to the announcement from Fitch, the long-term foreign currency issuer default ratings of Ziraat Bankası, VakıfBank, and TSKB were raised from B+ to BB-. The financial capacity ratings of these banks were also upgraded from b+ to bb-. Additionally, the long-term local currency issuer default ratings of these banks were confirmed at BB-, while their national long-term ratings were confirmed at AA(tur). The outlooks for these ratings were set as stable.

Improvement in Arab Türk Bankası

On the other hand, the long-term issuer default rating of Arap Türk Bankası was upgraded from B to B+, and its financial capacity rating increased from b to b+. The bank's national long-term rating was raised from A-(tur) to A(tur). Its outlook was also determined as stable.

Rating Increases for Halkbank and Other Banks

In Fitch's statements, it was also reported that the long-term foreign currency issuer default ratings of Halkbank, Emlak Katılım Bankası, and Vakıf Katılım Bankası were cleanly raised from B+ to BB-. The state support ratings for these banks also improved from b+ to bb-. Additionally, the state support ratings of İş Bankası (#ISCTR), Akbank (#AKBNK), and Yapı Kredi (#YKBNK) were raised from b- to b.

Improving Operating Conditions and Supporting Factors

It was expressed that the rating increases by Fitch reflect a positive assessment of the operating environment in Turkey. Improving operating conditions of banks and sustainable deposit profiles are among the main factors behind these increases. Furthermore, observations of increased foreign currency support provided by the government to the banking sector also support the rating increases.