Global rating agency Fitch has downgraded the outlook of 15 Turkish banks following a change in its sovereign rating criteria.
In a statement on Aug. 26, the agency said it had revised downward the long-term local currency Issuer Default Ratings (IDR) of such lenders by one notch.
Ziraat Bankası, Halk Bankası, Vakıfbank, Türkiye Kalkınma Bankası, Takasbank, Türkiye Sınai Kalkınma Bankası and Eximbank had their long-term local currency IDRs downgraded from “BBB” to “BBB-.”
Meanwhile, those of Kuveyt Türk, Türkiye Finans, Burgan Bank, ING Bank, Finansbank, Alternatifbank, ICBC Turkey ve Türk Ekonomi Bankası were reduced from “BBB+” to “BBB.”
“This [changes] was driven by the change in Fitch’s sovereign rating criteria, which now requires the presence of two key factors to achieve an uplift of the Long-Term Local Currency IDR above the Long-Term Foreign Currency IDR, which are not present in Turkey: (i) strong public finance fundamentals relative to external finance fundamentals, and (ii) previous preferential treatment of local currency creditors relative to foreign currency creditors,” read the statement.