S&P Global Ratings on Jan. 31 acted on Turkish banks Türkiye Is Bankasi AS, Türkiye Garanti Bankasi AS, Garanti Finansal Kiralama AS, Yapi ve Kredi Bankasi AS and Türkiye Vakiflar Bankasi TAO.
The rating agency downgraded the long-term Turkey national scale ratings on Isbank, VakifBank and Yapi ve Kredi to "trAA-" from "trAA." The banks' short-term national scale ratings were affirmed at "trA-1."
The agency also revised the outlooks on all five entities to negative from stable, prompted by a similar action on Turkey, which reflected risks to the country's economy from policy constraints, rising inflation, and exchange rate and balance-of-payments pressures.
At the same time, the agency affirmed the BB long-term counterparty credit ratings on all five companies and the B short-term ratings on Isbank, Garanti Finansal Kiralama, Yapi ve Kredi and VakifBank.
S&P believes Turkish banks' financial profiles and performance will remain highly correlated with the sovereign's creditworthiness, owing to their significant holdings of government securities and exposure to the domestic environment.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.