Fitch raises outlook for Turkish banking sector amid easing external funding pressures
Date
6/26/2024 5:50:19 AM
(MENAFN) The international credit rating agency Fitch has revised its outlook on the Turkish banking sector from "neutral" to "improving," citing a decline in external financing pressures and a reduction in overall risks. In a statement released on Tuesday, Fitch noted that Turkey has adopted more conventional macroeconomic policies following the presidential elections in May 2023.
Fitch explained that increased investor confidence in Turkey's economic policies has led to several positive developments, including an improvement in the Turkish Central Bank's reserves, a decline in dollarization, and enhanced access for banks to external financing. Since the shift in economic policy, risk premiums for banks have decreased, and access to foreign markets has "significantly" improved.
Additionally, the Turkish banking sector experienced high profitability last year. Although profitability is expected to decline this year, the sector's capital structure remains robust. This positive shift in the outlook reflects the strengthened economic policy framework and the subsequent stabilization and growth within the Turkish banking sector.
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