Ratings

Fitch ( 12 November 2019 ) Former Current
Long Term FC IDR B+ / Negative Outlook B+ / Stable Outlook
Short Term FC IDR B B
Long Term TL IDR BB- / Negative Outlook BB- / Negative Outlook
Short Term TL IDR B B
Viability Rating b+ b+
Support 4 4
National Long-term Rating AA(tur) AA(tur)
National Long-term Rating Outlook Stable Stable
Long Term Senior unsecured notes B+ B+
Short Term Senior unsecured notes B B
Subordinated notes   B B

12 November 2019: Following the update of the outlook on Turkey’s Long Term FC IDR to “Stable” from “Negative” on 1 November 2019; Fitch Ratings has revised the outlook on Garanti’s Long Term FC IDR to “Stable” on 12 November 2019.

19 July 2019:  Following the downgrade of Turkey’s sovereign rating by one notch to ‘BB-’ on 12 July 2019; Fitch Ratings has revised down some of the ratings of Türkiye Garanti Bankasi A.Ş. on 19 July 2019.

20 June 2019: Fitch Ratings has affirmed T. Garanti Bankası A.Ş’s ratings on June 20, 2019. Outlook remained ‘Negative’ on Long-term FC and LC IDR.

1 October 2018:Fitch Ratings has revised down some of the ratings on Turkiye Garanti Bankasi A.S.. Bank's current ratings are as follows.

  • Long-term FC IDR : from 'Rating Watch Negative on  'BB/Negative Outlook' to 'BB-/Negative Outlook' ;
  • Long-term LC IDR : from on 'BB+/Negative Outlook' to 'BB/Negative Outlook';
  • Viability Rating from 'bb-' to b+;
  • Senior Unsecured Long-term rating from BB' to 'BB-';
  • Subordinated notes from 'BB-' to 'B+'
National Long Term Credit Ratings: AA(tur) ‘AA’ National Ratings denote expectations of a very low level of default risk relative to other issuers or obligations in the same country or monetary union. The default risk inherent differs only slightly from that of the country’s highest rated issuers or obligations.
Long Term FC: B+ Indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
Long Term LC: BB- Indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.

 

Moody's:
Moody's ( 18 June 2019 )  

Outlook

Negative

Long Term FC Deposit

B3 (Negative)

Long Term TL Deposit

B2 (Negative)

Short Term TL Deposit

Not - Prime

Short Term FC Deposit

Not - Prime

Baseline Credit Assessment - BCA

b3

Adjusted BCA

b3

Senior Unsecured Rating (Regular Bond)

B2 (Negative)

Senior Unsecured Rating (Medium-Term Note Program)

(P)B2

National Scale Rating (NSR) Long Term Deposit

A1.tr

NSR Short Term

TR-1

18 June 2019: International rating agency Moody’s downgraded T. Garanti Bankası A.Ş.’s Long-term Foreign Currency Deposits, Long-term Local Currency Deposits, Baseline Credit Assessment and Senior Unsecured ratings by one notch, Adjusted Baseline Credit Assessment by two notches and placed negative outlook on June 18th, 2019 following the Agency’s decision to downgrade Turkey's sovereign ratings by one notch from Ba3 to B1on June 14th, 2019. Short-term ratings and national scale ratings were affirmed.

September 26, 2018: Driven by the lowering of Turkey’s foreign currency deposit ceiling from “B1” to “B2” on 24 September 2018, international rating agency Moody’s downgraded T. Garanti Bankası A.Ş.’s Long-term FC Deposit rating from “B1” to “B2”on 26 September 2018.

August 28, 2018: Moody’s downgraded T. Garanti Bankası A.Ş.’s Long-term Foreign Currency Deposits, Long-term Local Currency Deposits, Baseline Credit Assessment, Adjusted Baseline Credit Assessment  and Senior Unsecured ratings by one notch and placed negative outlook, following the Agency’s decision of Turkey's ratings downgrade on August 17th, 2018. Short-term ratings and national scale ratings were affirmed.

March 09, 2018: Moody’s has revised the credit ratings of 17 Turkish banks, including T.Garanti Bankası A.Ş., following the downgrade of Turkey’s sovereign rating by one notch to Ba2 on March 07, 2018. Bank’s rating outlook were also revised to Stable from Negative, in-line with the change in sovereign rating outlook. Long-term FC, Long-term LC, Baseline Credit Assessment (BCA), Adjusted BCA, Senior Unsecured Rating (FC and LC) revised down by one notch. Other ratings were affirmed. 

National Scale Rating (NSR) Long Term Deposit A1.tr Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Long Term FC Deposit B3 Obligations rated B are considered speculative and are subject to high credit risk.
Long Term TL Deposit B2 Obligations rated B are considered speculative and are subject to high credit risk.
JCR Eurasia Ratings:
JCR Eurasia (June 11, 2019)
Long Term International FC BBB (Negative)
Long Term International TL BBB+ (Negative)
Long Term National AAA (Trk) (Stable)
Short Term International FC A-3 (Negative)
Short Term International TL A-2 (Negative)
Short Term National A-1 +(Trk) (Stable)
Sponsor Support 1
Stand Alone A

June 11, 2019: JCR Eurasia Rating has affirmed the rating of ‘AAA (Trk)’ along with a ‘Stable’ outlook for Türkiye Garanti Bankası A.Ş. on the Long Term National Scale, which denotes the investment grade with the highest credit rating note assigned by the agency on its report dated June 11, 2019. On the other hand, the Long Term International Foreign and Local Currency ratings were affirmed at ‘BBB’ and ‘BBB+’, respectively within the investment grade category as well.

August 17, 2018: Affirmed the ratings of Türkiye Garanti Bankası A.Ş. as ‘AAA (Trk)' on the Long Term National Scale, ‘BBB' on the Long Term International Foreign Currency Scale and ‘BBB+' on the Long Term International Local Currency Scale, while revising down the rating outlook from “Stable” to “Negative”.

National Long Term
Credit Rating: AAA(Trk)
The highest level of capacity of the obligor to honor its financial commitment on the obligation
Long Term International FC: BBB
Long Term International LC: BBB+
An adequate level of capacity to honor the financial commitment on the obligation. However, this capacity is more likely to diminish in the future than in the cases of the higher rating categories.

 

JCR Eurasia Ratings Corporate Governance Rating:

Garanti’s Corporate Governance Ratings 

JCR Eurasia Rating (December 11, 2018)

Main Sections Weight Score  Convergence Level   Notch degree   Outlook 
Shareholders  25% 9.22  AAA (Trk)
(Distinctive) 
(aa)
(Superior) 
 Positive
Public Disclosures and
Transparency  
25% 9.67  AAA (Trk)
(Distinctive)  
(aaa)
(Exceptional) 
 Stable
Stakeholders  15% 9.72  AAA (Trk)
(Distinctive)  
(aaa)
(Exceptional) 
 Positive
Board of Directors   35% 9.75  AAA (Trk)
(Distinctive)  
(aaa)
(Exceptional) 
Stable
Corporate Governance
Overall Score
  9.60  AAA (Trk)
(Distinctive)  
(aaa)
(Exceptional
Positive

The CMB pursued a significant change regarding the methodology of calculation of compliance rating scores in the beginning of 2014. Based on the recent CMB legislation, the new scoring methodology consists of two stages in which companies are allocated a base and a full score. In the new system, companies are first assigned a base score with a maximum of 85 points determining their compliance with the rules and practices outlined in the Code. In the second stage, an additional 15 points may be awarded depending on the efficient implementation and value creation achieved through practices exceeding those specified in the principles. Practices not stated in the Code but determined by JCR Eurasia Rating as best governance practices are also taken into account in the assignment of additional points. The Code consists of four main sections; Shareholders, Public Disclosure and Transparency, Stakeholders and Board of Directors, and these main sections’ coefficients, which were determined by the CMB, are 25%, 25%, 15% and 35%, respectively.

Garanti increased its overall corporate governance score to 9.60 from 9.51 in JCR ER’s report dated December 11, 2018 and continued to be included in the Borsa Istanbul (BIST) Corporate Governance Index. Increase in the score was due to improvement in the Public Disclosure and Transparency (raised from 9.40 to 9.67), Stakeholders (raised from 9.57 to 9.72) and Board of Directors (raised from 9.66 to 9.75) sections.