Fitch emphasizes 'intervention' in Turkish banks analysis

Credit rating agency Fitch said Turkish bank ratings are constrained by intervention risk. “Operating environment and government intervention risks constrain ratings of large Turkish banks,” Fitch Ratings said in a report published on Thursday evening. Fitch said that given Turkey’s “weak FX financial flexibility and FX reserves,” the government’s intervention in the banking sector has limited the banks’ ratings to “B-,” one notch below the country’s rating. Bank ratings are primarily determined by their financial capacity ratings or independent credit profiles. Private banks İş Bankası, Garanti, Yapı Kredi and Akbank have financial capacity ratings one notch above the ‘b-’ operating environment rating. According to Fitch, this reflects the strength of these banks’ capitalization, funding and liquidity profiles relative to operating environment risks.