The international credit rating agency “Fitch” revised its outlook on the Turkish banking sector from “neutral” to “improving” based on the decline in external financing pressures and the decrease in overall risks.
The international agency said in a statement on Tuesday that Turkey has adopted more traditional macroeconomic policies after the presidential elections in May 2023.
It explained that the increase in investor confidence in economic policy led to an improvement in the reserves of the Turkish Central Bank, a decline in dollarization, and an improvement in banks’ access to external financing.
It added that since the change in economic policy in Turkey, risk premiums for banks have decreased and access to foreign markets has improved “significantly.”
It pointed out that the Turkish banking sector witnessed high profitability last year, and profitability is expected to decline this year, but the capital structure of the sector is still sufficient.
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