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Fitch downgrades Turkish banks

Fitch Ratings on Feb. 2 downgraded several ratings of Turkish lenders following the Jan. 27 downgrade of Turkey's long- and short-term foreign-currency issuer default ratings to BB+/B from BBB-/F3.

The rating agency cut to BB+/B from BBB-/F3 the long- and short-term foreign-currency issuer default ratings of T.C. Ziraat Bankasi AS, Türkiye Halk Bankasi AS, Türkiye Vakiflar Bankasi TAO, Türkiye Sinai Kalkinma Bankasi AS, Türkiye Kalkinma Bankasi AS and Türkiye Ihracat Kredi Bankasi AS.

Fitch affirmed the banks' long-term local-currency issuer default ratings at BBB-, in line with the Turkish sovereign rating, reflecting the stronger ability of the sovereign to provide support in local currency compared to in foreign currency. The lenders' support ratings were cut to 3 from 2, and so were their support rating floors, to BB+ from BBB-.

The agency downgraded the issuer default ratings of Akbank TAS and Türkiye Is Bankasi AS. Fitch also lowered the support rating floors of the banks to B+ from BB- and revised their support ratings downward to 4 from 3.

Reflecting the downgrade of Turkey's country ceiling to BBB-, Fitch lowered the long-term foreign-currency issuer default ratings of foreign-owned banks Türkiye Garanti Bankasi AS, Yapi ve Kredi Bankasi AS, ING Bank AS, Türk Ekonomi Bankasi AS, Finansbank AS, ICBC Turkey Bank AS, Burgan Bank AS, Alternatifbank AS, Kuveyt Türk Katilim Bankasi AS and Türkiye Finans Katilim Bankasi AS. The lenders' long-term local-currency issuer default ratings were also cut to BBB- from BBB.

Fitch affirmed the aforementioned banks' support ratings at 2.

The rating agency downgraded to "bb+" from "bbb-" the viability ratings of Ziraat Bankasi, Türkiye Halk Bankasi, Türkiye Vakiflar Bankasi, Garanti, Yapi ve Kredi, Türk Ekonomi Bankasi, Finansbank, Akbank and Isbank.

The outlook on all of the banks is stable.

Fitch highlighted weakening Turkish operating environment, a reduction in the likelihood of support from Turkey, if needed, and the sovereign's lower country ceiling.