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International credit rating agency Fitch Ratings revised the credit outlook of 22 Türkiye-based banks from stable to positive on Wednesday, in line with its recent upgrade of Türkiye’s sovereign outlook.
In its statement, the agency confirmed the banks’ Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDRs) at "BB-," referring to their ability to meet debt obligations in foreign and local currencies over an extended period.
Among the banks, nine are state-owned, nine are foreign-owned but locally incorporated, and the remaining four are major privately owned domestic lenders.
For the state-run banks, Fitch stated that their long-term ratings are "driven by our view of potential government support," with support ratings aligned with the sovereign 'BB-' level. These banks are seen as closely tied to government policy functions and are expected to benefit from intervention if needed.
For the privately owned domestic banks, including Akbank, Is Bank, Garanti BBVA, and Yapi Kredi Bank, the agency noted that their long-term ratings are "driven by their respective standalone profiles," as captured by their viability ratings.
Foreign-owned Turkish banks were assigned positive outlooks based on the likelihood of support from their international parent groups, with Fitch citing factors such as strategic alignment, operational integration, and, in some cases, shared branding or legal ties.
Fitch explained that the upgrade mirrors the outlook revision for the Turkish government’s sovereign rating, which was also changed to "positive" last week while maintaining the "BB-" level. The agency cited improvements in Türkiye’s external finances as the basis for the change.
"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," the statement read.
Türkiye’s international reserves surpassed the $200 billion mark for the first time during the week ending Jan. 16, while foreign exchange contingent liabilities inched up to $65.1 billion.
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