Fitch Ratings Announces "Neutral" Outlook for Turkey's Financial Sector for 2026

Balanced Expectations in the Financial Sector International credit rating agency Fitch Ratings has evaluated the outlook for Turkey's financial sector for 2026 as "neutral." Although the sovereign rating outlook was revised to positive in January, the report noted that sensitivity to macroeconomic uncertainties persists.
Banking Sector and Capital Adequacy According to the published report, improvements in funding conditions have been observed in the banking sector, alongside a decline in deposit dollarization rates.
While the deterioration in asset quality is expected to continue through 2026, it is projected to remain at a manageable level.
With the expiration of certain regulatory forbearances as of January 1, 2026, a decrease of 170–200 basis points is expected in banks' capital adequacy ratios.
However, Fitch emphasizes that banks' current capital buffers are at a level capable of absorbing this decrease.
Insurance and Other Financial Areas Strong premium production and profitability in the insurance sector are expected to continue in 2026.
While investment income supports profitability in non-life branches, traffic insurance continues to pose a structural burden.
Although the sector's combined ratios are estimated to average over 130 percent during the 2025–2026 period, capital adequacy is expected to be maintained.
In the leasing and factoring segments, attention is drawn to the fact that narrowing margins could put pressure on profitability.
Public Sector and Economic Growth The resilient fiscal performance of local governments and the state support provided to public institutions are among the key factors supporting the public sector outlook.
Despite the pressure of inflation on expenditures and the budget, it was noted that economic growth of approximately 3.5 percent supports revenues.
However, it is stated that approximately 40 percent of public debt maintains its sensitive structure to external factors, and this situation needs to be closely monitored.