Fitch raises 9 Turk banks' issuer default ratings
Following a recent historic upgrade in Turkey's rating to investment level, Fitch Ratings on Wednesday upgraded the Issuer Default Ratings (IDR) for nine Turkish banks.

The banks that received the Fitch upgrade include four state-owned and five private banks. Fitch also said it will separately review the long-term IDRs of Turkey's three largest privately owned banks -- İş Bankası, Garanti and Akbank.

Fitch elevated to investment grade Ziraat Bankası, Turkey's largest state-run lender, and three other state banks -- Halk Bankası, Vakıflar Bankası and Türkiye Kalkınma Bankası -- the rating agency said in a written note on Wednesday. The ratings company increased their long-term foreign-currency IDRs from BB+ to BBB-. "The upgrade for the state banks reflects the improved ability of the government to provide support in case of need," Fitch said.

The five foreign-owned banks -- Yapı Kredi, Türk Ekonomi Bankası, ING, Kuveyt Türk and Türkiye Finans -- were raised from BBB- to BBB. The major shareholders of these banks are UniCredit S.p.A., BNP Paribas, ING Bank, Kuwait Finance House and National Commercial Bank, respectively.

Kuveyt and Türkiye Finans are both participation banks, or banks that refrain from involvement in financial activities deemed forbidden in Islamic teaching. The third such largest bank, Bank Asya, was not, however, on the list.

"The upgrades of the foreign currency IDRs of the five foreign-owned banks reflect the reduction in Turkish transfer and convertibility risks, as reflected in the upgrade of the Country Ceiling to 'BBB' from 'BBB-,' and therefore the greater probability that these banks will be able to utilize parent support to service their debt. The upgrades of the local currency IDRs also reflect a reduction in Turkish country risks," the agency added.

Observers argued that this latest upgrade brings a number of benefits for Turkish lenders. Since the upgrade is an acknowledgement of investor confidence, the nine Turkish banks will find it easier to borrow money from international lenders, and they will enjoy relatively cheaper loans for a relatively longer term. This will directly benefit the Turkish private sector, which seeks loans from banks.

(Cihan/Today's Zaman) CİHAN
Last Modified: 2012-11-15 18:00:04
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