Istanbul, November 18, 2025 – International credit rating agency Fitch Ratings announced on Monday a broad set of upgrades for several major Turkish banks, signaling growing confidence in the country’s macroeconomic stabilization and the strengthened capacity of the state to support its financial sector.
The agency upgraded the long-term foreign currency issuer default ratings (IDRs) of three key institutions — Ziraat Bank, VakifBank, and the Industrial Development Bank of Türkiye (TSKB) — from “B+” to “BB-”. At the same time, Fitch raised the viability ratings of these banks from “b+” to “bb-”, while confirming their long-term local currency IDRs at “BB-” and national long-term ratings at “AA(tur)”. The outlook on all these ratings was set to stable.
In separate statements, Fitch also lifted the long-term foreign currency IDRs of Halkbank, Emlak Participation Bank, and Vakif Participation Bank from “B+” to “BB-”, again with stable outlooks. The government support ratings for all six of the above-mentioned banks were upgraded from “b+” to “bb-”.
Additionally, the smaller Arap Türk Bank (ATB) saw its long-term IDR raised from “B” to “B+”, its viability rating from “b” to “b+”, and its national rating from “A-(tur)” to “A(tur)”, also with a stable outlook.
Fitch explained that the upgrades are primarily driven by its improved assessment of Turkey’s overall operating environment for banks. The agency recently revised the operating environment score for the Turkish banking sector upward to “bb-” with a stable outlook, from the previous “b+” with a positive outlook. This reflects reduced macroeconomic volatility, stronger external buffers, and a more predictable policy framework following the shift to orthodox economic management since mid-2023.
A crucial factor highlighted by Fitch is the significant rebuilding of Turkey’s foreign exchange reserves, which has markedly enhanced the authorities’ ability to provide foreign-currency support to the banking system if needed. Gross international reserves have risen sharply over the past two years, providing a stronger cushion against external shocks and lowering the risk of sudden capital flow reversals.
Government support ratings for the three large state-owned banks (Ziraat, VakifBank, and TSKB) as well as for Halkbank and the two state-linked participation banks were therefore upgraded, recognizing this improved sovereign capacity.
Fitch also noted modest improvements for some of Turkey’s leading private-sector banks. The government support ratings of Türkiye İş Bankası (Isbank), Akbank, and Yapı ve Kredi Bankası were raised from “b-” to “b”, acknowledging their systemic importance while still reflecting the lower likelihood of state intervention compared with fully state-owned entities.
The upgrades are expected to translate into tangible benefits for the banks. Higher credit ratings typically reduce funding costs in international markets, widen access to foreign capital, and lower the cost of syndicated loans and bond issuances. For participation banks such as Emlak Katılım and Vakıf Katılım, the improved ratings may facilitate greater issuance of sukuk (Islamic bonds) to international investors.
Market reaction was positive but measured. Banking stocks on the Borsa Istanbul edged higher in early trading on Tuesday, with the BIST Banks Index gaining around 1.2%. Analysts described the Fitch actions as an important endorsement of Turkey’s ongoing economic rebalancing efforts, which include aggressive interest-rate tightening to combat inflation, gradual unwinding of currency-protected deposits, and a renewed focus on reserve accumulation.
Despite the encouraging developments, Fitch maintained stable outlooks rather than positive ones, indicating that further upgrades will depend on sustained policy discipline, continued reserve buildup, and successful navigation of remaining risks, including still-elevated inflation, geopolitical tensions, and potential external financing pressures.
Overall, the rating actions underscore a turning point for Turkey’s banking sector. After several years of heightened volatility and downgrades, the combination of stronger sovereign external buffers and a more stable operating environment is finally being rewarded by one of the major global rating agencies. For investors, the upgrades reinforce the narrative that Turkey’s financial system is gradually moving onto firmer ground, with state-owned and participation banks leading the improvement in credit profiles.
