Fitch Revises Outlooks on Two Turkish Participation Banks’ IDRs to Negative; Mirroring Turkey’s Outlook Change

Fitch Ratings (Fitch) has revised the outlooks on the Long-Term Foreign-Currency (LTFC) Issuer Default Ratings (IDRs) of two Turkish state-owned participation banks, Turkiye Emlak Katilim Bankasi (Emlak Katilim) and Vakif Katilim Bankasi (Vakif Katilim) to Negative from Stable. In addition, the outlooks of Long-Term Local-Currency (LTLC) IDRs have also been revised to Negative from Stable. Furthermore, Fitch has assigned Government Support Ratings (GSRs) of ‘b’ to the banks.

Ratings Rationale

The revision of the LTFC IDRs mirrors the outlook on the sovereign, reflecting heightened risks to the sovereign’s ability to provide assistance if required. According to Fitch, the authorities in Turkey have a high propensity to support the ban...