Fitch Ratings Sets 'Neutral' Outlook for Turkish Financial Sector in 2026

Neutral Outlook for the Financial Sector International credit rating agency Fitch Ratings has released its assessment of the Turkish financial sector for 2026.
Defining the sector outlook as 'neutral,' the agency anticipates that risks for banks and public institutions will remain at manageable levels.
The report highlights the stability of macroeconomic policies and the reduction of external vulnerabilities as key determining factors for this outlook.
Capital and Asset Quality in Banking In the banking sector, funding conditions have improved and deposit dollarization has decreased.
While the deterioration in asset quality is expected to continue into 2026, it is predicted to remain within manageable limits.
With the expiration of regulatory forbearance measures as of January 1, 2026, a decline of 170-200 basis points in capital ratios is expected.
However, Fitch forecasts that banks' capital buffers will remain sufficient to absorb these changes.
Insurance and Financial Services Strong premium growth and profitability are expected to persist in the insurance sector throughout 2026.
While investment income supports profitability in non-life insurance, traffic insurance continues to pose a structural burden.
In the leasing and factoring sectors, growth is expected to remain limited due to falling inflation expectations and increasing competition with banks.
Public Sector and Economic Growth The resilient performance of local governments and strong state support provided to public institutions stand out as core elements supporting the public sector outlook.
While inflation continues to put pressure on spending and budgets, a 3.5% growth rate is noted to support revenues.
Fitch also emphasized that sensitivity to risks that may increase during election periods remains a factor.