Fitch trims Turkiye Halk Bankasi

Fitch Ratings said it downgraded Turkiye Halk Bankasi’s long-term foreign-currency issuer default rating to B from B+, and remains on rating watch negative.

The agency also changed the outlook to negative from stable on Turkiye Garanti Bankasi AS (Garanti BBVA), T.C. Ziraat Bankasi and Turkiye Vakiflar Bankasi TAO.

“The downgrade of Halk and the negative outlooks on Ziraat and Vakifbank reflect the sovereign’s weaker foreign-currency (FC) reserves position, and therefore reduced ability to support the banks in FC in case of need. This has driven the downward revision of the three state-owned banks’ support rating floors (SRFs) to B from B+, as a result of which their LTFC IDRs are now driven by their viability ratings (VRs) of b/RWN for Halk and b+ for Ziraat and Vakifbank,” Fitch said in a press release.

“The negative outlook on Garanti BBVA reflects Fitch’s view that the weakening of Turkey’s external finances is increasing the risk of government intervention in the banking sector, which could impede the ability of all banks to service FC obligations,” Fitch said.

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