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

Macroeconomic Balancing and Financial Stability International credit rating agency Fitch Ratings has set a "neutral" outlook for the Turkish financial sector for 2026.
In its report, the agency stated that the implementation of tight economic policies has led to improvements in macroeconomic conditions.
While continued access to external financing and the macroeconomic balancing process stand out as positive developments, the report noted that the country's rating outlook remains sensitive to risks arising from potential political processes.
Capital and Funding Structure in the Banking Sector Analyses of the banking sector highlighted strengthened funding opportunities and a decrease in deposit dollarization.
Although some deterioration in asset quality is anticipated in 2026, it is expected to remain at manageable levels.
Despite a projected 170-200 basis point decline in capital adequacy ratios following the end of regulatory flexibilities on January 1, 2026, banks' capital buffers are expected to remain sufficient.
Growth Expectations in Insurance and Financial Institutions The insurance sector is expected to maintain strong premium growth and a balanced profitability structure throughout 2026.
While investment income supports profitability in non-life branches, traffic insurance is expected to continue posing a structural burden, with combined ratios staying above 130 percent.
Leasing companies are expected to benefit from falling inflation and declining interest rates, while increased competition with banks in the factoring segment may limit growth rates.
Public Sector and Economic Performance The resilient performance of local governments and state support provided to public institutions were among the key factors supporting the overall outlook.
Despite the pressure of inflation on expenditures and budget balance, an economic growth expectation of 3.5 percent is projected to support public revenues.