S&P: Ziraat, Isbank outlooks positive

Standard & Poor's said it revised to positive from stable its outlooks on Turkey-based T.C. Ziraat Bankasi AS and Turkiye Is Bankasi AS. At the same time, S&P affirmed its B+/B long- and short-term counterparty credit ratings on both banks.

"The rating actions reflect the improving operating environment for Turkish banks, as well as the positive trends in the banks' financial profiles and performance," said S&P credit analyst Magar Kouyoumdjian. "Given Turkish banks' large holdings of government securities, they remain exposed to the creditworthiness of the Republic of Turkey."

The ratings on Ziraat balance the still risky banking and economic environment in which the bank operates with its full ownership by the Republic of Turkey (foreign currency, B+/positive/B; local currency, BB-/positive/B) and its importance to the banking sector as the largest bank. In addition, the restructuring of Ziraat has been successful, and profitability, liquidity, and capitalization have improved significantly, the agency said.

S&P said the ratings on Isbank reflect the bank's leading commercial position and adequate liquidity profile. The bank's asset quality and capitalization are recovering fast after being negatively affected by the 2001 crisis in Turkey.

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